Should You Hold Carnival (CCL)?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Meme Value Stock Searches in the Last Month Rank Ticker Name Searches #1 [CCL]( Carnival 71 #2 [RCL]( Royal Caribbean Cruises 24 #3 [NCLH]( Norwegian Cruise Line Holdings. 6 #4 [VIK]( Viking Holdings 1 #ad [Making Sense Of Your Money With The Juice]( Brought to you by [Contrarian Outlook]( [Buy this Fund TODAY for 10.5% Monthly Dividends]( [Contrarian Outlook - Buy this Fund TODAY for 10.5% Monthly Dividends]( One of my favorite income plays right now is an under-the-radar fund that pays an incredible 10.5% monthly dividend. I'm so excited about this fund that I've made it a core holding in my "8% Monthly Payer" portfolio - an easy-to-buy collection of stocks and funds that could hand you $3,330+ in dividend payouts every single month! [Click here to learn more.]( Is it too Late to Buy Carnival (CCL)? Carnival’s (CCL) record-breaking Q2 performance sent financial pros into a frenzy, according to our TrackStar data. The company trounced estimates as vacation travel continued to bounce back from the pandemic. [Guidance] [Source: Carnival Q2 Investor Presentation]( Shares climbed over 20% on the news before giving up half those gains a few days later. Apparently, the hurricane barreling through the Caribbean was enough to send all cruise lines' stocks lower. But does that give us a second chance to scoop up shares at a discount? Carnival’s Business With a fleet of over 90 ships visiting more than 700 ports globally, Carnival is the world’s largest cruise line. And they have a little something for everyone, from family-friendly adventures to luxury voyages, across their brands, including Carnival Cruise Line, Princess Cruises, Holland America Line, and Costa Cruises. Carnival's ships feature extensive onboard amenities such as restaurants, entertainment venues, spas, and recreational facilities. [Portfolio] [Source: Carnival Q2 Investor Presentation]( In 2023, the company served approximately 13 million guests, showcasing its significant market presence in the global cruise industry. Carnival Corporation & plc segments its business into the following areas: - North America and Australia (NAA) Cruise Operations (68% of total revenues) - Includes brands primarily serving North American and Australian markets - Europe Cruise Operations (31% of total revenues) - Comprises brands focused on European cruise travelers - Cruise Support (1% of total revenues) - Provides services to the cruise brands, including port destinations and islands - Tour and Other (<1% of total revenues) - Consists of hotel and transportation operations in Alaska Revenues are also broken down by passenger tickets (65% of sales) and onboard/other (35% of sales). In its recent second-quarter 2024 earnings report, Carnival delivered record revenues of $5.4 billion, with net yields significantly exceeding 2023 levels. The company also achieved all-time high booking volumes for future sailings at considerably higher prices compared to the previous year. [Demand] [Source: Carnival Q2 Investor Presentation]( Financials [Financials] Source: Stock Analysis The pandemic hit the cruise industry hard. Carnival added more than $23 billion to its $11.5 billion debt load to stay afloat. Since then, revenues have exceeded pre-pandemic levels, as has gross profits. However, operating income remains about $500 million, shy of its peak of $3.3 billion in 2019. Interest expenses exploded from $206 million to peak at $2.1 billion in 2023. Since then, the company’s been working down its debt load to $30.7 billion in the latest report. [Debt payments] [Source: Carnival Q2 Investor Presentation]( The company’s maturity schedule includes $1.2 billion this year, followed by $1.7 and $2.8 billion in subsequent years. With their current profitability, Carnival doesn’t foresee this being a problem. Valuation [Valuation] Source: Seeking Alpha All the cruise lines trade at similar multiples, save for Viking Holdings (VIK), a newcomer that recently debuted its IPO. Notably, Carnival and Norwegian Cruise (NCLH) trade at higher price-to-cash multiples than Royal Caribbean (RCL), whose share price has exceeded pre-pandemic levels as the company took on the least amount of debt to survive. Growth [Growth] Source: Seeking Alpha Norweigein has shown strong growth as it’s begun to bring new ships online. All the cruise lines forecast a strong 2024, though none expect to generate free cash flow. The real test is how well the companies are booking into 2025 and beyond, which Carnival did well in Q2. Profitability [Profit] Source: Seeking Alpha While Carnival’s gross margins beat its peers, the EBITDA and EBIT margins aren’t nearly as impressive. We can see the profitability gap between Royal Caribbean and the rest on these metrics, especially net income. [Last chance to collect a BIG Bitcoin dividend]( This is your FINAL countdown to a $2.05 per share dividend on July 29th from this new Bitcoin ETF we found. This high-growth ETF is the #1 way to collect monthly income from Bitcoin without owning a single coin — and that's not all... It's up 5.62% since its latest announcement... And it's paying out a dividend that's 161% BIGGER than the highest-yielding aristocrats! Plus, it's still flying under the radar, which means... shares are CHEAP right now. You can load up on shares for just $5,000 with matching... ...and potentially collect $2,286 your first year... ...then $5,675 on year two... ...$10,695 in year three... and $18,133 by your fourth year! But July 29th (TODAY) is your last chance to get in and secure this massive payday. Don't wait for this opportunity to disappear. Secure your shares NOW... And get ready to collect your Bitcoin dividend. [Go here NOW before it's too late]([Ad] Our Opinion 6/10 While Carnival has made significant gains, its debt load is troublesome. Current cash from operations comes in at $4.5 billion annually, while Capexx is $3.9 billion. That leaves $600 million each year for debt repayments. At this rate, it will take 20 years to get back to prepandemic levels. This will continue to drag on the stock for years. We feel the stock is priced fairly, though it could have some upside should rates drop. 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