Head to Head Review: Royal Caribbean Cruises (RCL) vs. Hoegh LNG Partners (HMLP)

Royal Caribbean Cruises (NYSE: RCL) and Hoegh LNG Partners (NYSE:HMLP) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

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This is a breakdown of current ratings and recommmendations for Royal Caribbean Cruises and Hoegh LNG Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Caribbean Cruises 1 3 10 0 2.64
Hoegh LNG Partners 0 0 4 0 3.00

Royal Caribbean Cruises currently has a consensus price target of $137.43, suggesting a potential upside of 28.98%. Hoegh LNG Partners has a consensus price target of $21.00, suggesting a potential upside of 22.45%. Given Royal Caribbean Cruises’ higher probable upside, research analysts plainly believe Royal Caribbean Cruises is more favorable than Hoegh LNG Partners.

Insider and Institutional Ownership

75.4% of Royal Caribbean Cruises shares are owned by institutional investors. Comparatively, 60.7% of Hoegh LNG Partners shares are owned by institutional investors. 15.3% of Royal Caribbean Cruises shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Royal Caribbean Cruises and Hoegh LNG Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Caribbean Cruises $8.78 billion 2.57 $1.63 billion $7.53 14.15
Hoegh LNG Partners $143.53 million 2.36 $48.78 million $1.36 12.61

Royal Caribbean Cruises has higher revenue and earnings than Hoegh LNG Partners. Hoegh LNG Partners is trading at a lower price-to-earnings ratio than Royal Caribbean Cruises, indicating that it is currently the more affordable of the two stocks.

Dividends

Royal Caribbean Cruises pays an annual dividend of $2.40 per share and has a dividend yield of 2.3%. Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 10.0%. Royal Caribbean Cruises pays out 31.9% of its earnings in the form of a dividend. Hoegh LNG Partners pays out 126.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Royal Caribbean Cruises has increased its dividend for 6 consecutive years and Hoegh LNG Partners has increased its dividend for 2 consecutive years.

Volatility & Risk

Royal Caribbean Cruises has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Hoegh LNG Partners has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Profitability

This table compares Royal Caribbean Cruises and Hoegh LNG Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Caribbean Cruises 18.52% 15.85% 7.27%
Hoegh LNG Partners 33.99% 10.71% 4.28%

Summary

Royal Caribbean Cruises beats Hoegh LNG Partners on 14 of the 17 factors compared between the two stocks.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises brands. The Royal Caribbean International brand provides itineraries to destinations worldwide, including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal, and New Zealand with cruise lengths that range from 2 to 23 nights. The Celebrity Cruises brand offers itineraries to destinations, such as Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, India, New Zealand, the Panama Canal, and South America with cruise lengths ranging from 2 to 19 nights. The Azamara Club Cruises brand offers cruise itineraries ranging from 4 to 21 nights to destinations, including Asia, Australia/New Zealand, Northern and Western Europe, the Mediterranean, Central and North America, and the less-traveled islands of the Caribbean. As of December 31, 2017, the company operated 49 ships with itineraries ranging from 2 to 23 nights to approximately 540 destinations. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.

About Hoegh LNG Partners

H枚egh LNG Partners LP focuses on owning, operating, and acquiring floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers, and other LNG infrastructure assets under long-term charters. The company also offers ship management services. As of March 31, 2017, it had a fleet of five FSRUs. H枚egh LNG GP LLC is the general partner of the company. The company was founded in 2014 and is headquartered in Hamilton, Bermuda. H枚egh LNG Partners LP is a subsidiary of H枚egh LNG Holdings Ltd.