Stocks

Should I buy Royal Caribbean stock right now?

In:
Category: 
01Apr2020

Aside from questions about when Royal Caribbean will resume sailings, the next most commonly asked question I have been seeing is if buying Royal Caribbean stock is a good idea.

The COVID-19 situation has wreaked havoc on the stock market, and cruise line stocks have been among the hardest hit.

Royal Caribbean Cruises Ltd. (NYSE: RCL) is -74.16% lower on its value in year-to-date trading and has touched a low of $19.25 and a high of $135.32 in the current 52-week trading range.

Is Royal Caribbean's stock a good buy?

Of the many rules and advice one can give about buying stocks, it is you want to "buy low and sell high".  Essentially, buy stocks when they are at their lowest and sell when they are at their highest.

Most stock experts believe cruise line stocks are pretty darn low, although it is anyone's guess if the price has bottomed-out quite yet.

There are a lot of factors currently working against Royal Caribbean: their ships are shutdown until at least May, there is little hope of a bailout by the U.S. government, and the general public's anxiety about COVID-19 and going on a cruise.

On the flip side, the appeal of buying Royal Caribbean's stocks is some day, this will pass and the cruise line is very likely to return to a position of making billions of dollars again in profit, which saw its stock price rocket to the top of the market.

Chris Woronka, senior leisure analyst at Deutsche Bank, commented on the cruise line's current situation to Barron's, "There is meaningful cash burn as the ships are idle. But I do think these companies all have strong support from their banking groups."

“You would prefer to have some operation during the peak summer period, but it’s unknown exactly what that’s going to look like,” says Woronka. “You’re going to scale back into profitability. It’s not a switch where you go from zero to normal. It’s going to be a process to build back to profitability, but it starts with getting some sailings going again.”

The share price would not as cheap as it is if there were not risks. Analysts seem to agree the dominant risk is how long COVID-19 drags on, especially if it goes into next year. In addition, even when the crisis is over, how quickly consumers will want to cruise again is debatable.  And then there is the risk that affects everyone, which is the possibility of a global recession that will slow any recovery down.

This is a classic "can you weather storm now, in anticipation of better days later" situation.

Benefits of owning stock beyond investment

You should buy any stock because you think it is a good investment, but owning Royal Caribbean stock has an added benefit if you own at least 100 shares.

The benefit is

  • $250 Onboard Credit per Stateroom on Sailings of 14 or more nights
  • $100 Onboard Credit per Stateroom on Sailings of 6 to 13 nights.
  • $50 Onboard Credit per Stateroom on Sailings of 5 nights or less.

You may request this benefit multiple times-as often as you sail on Royal Caribbean International, Celebrity Cruises or Azamara. 

Benefit is non-transferable and not available to employees, agents of Royal Caribbean Cruises Ltd. or its subsidiaries and affiliates, travel agents and tour operators. Benefit is not combinable with interline rates, travel agent rates, and employee friends and family rates. Benefit cannot be redeemed for chartered sailings, any Galapagos sailings or complimentary sailings.

It is essentially free onboard credit for investing in a stock you may have had interest in buying anyway, but the combinability is a hit or miss if you can actually take advantage of it or not.

Disclosure: I/we do not own any stocks mentioned in this article, nor any position in the stocks mentioned.  I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from RoyalCaribbeanBlog.com). 

All about the Royal Caribbean shareholder discount

In:
26Jun2019

Royal Caribbean offers a variety of discounts at any time of the year, but one discount that is consistently offered, and yet not very well-known, is the discount for people that own shares of Royal Caribbean stock.

The Royal Caribbean shareholder benefit may not be the most lucrative discount available, but every bit helps and it might save you some money.  Here is what you need to know about the stockholder discount.

Eligibility for the shareholder discount

The shareholder discount is available for any Royal Caribbean shareholder with a minimum of 100 RCL shares at the time of sailing.

The benefit is only available for the stateroom in which the shareholder (with a minimum of 100 shares) is sailing. Only one shareholder credit per stateroom on any one sailing. If shares are held jointly, 100 shares are required for each onboard credit request on any one sailing.

There is no limit on how many times you may take advantage of this discount, but it is one benefit per sailing.

Shareholder Discount Amount

The exact amount of your discount will depend on the length of your sailing.  The type of stateroom you stay in is irrelevant. The discount is applicable on any eligible Royal Caribbean International sailing.

  • $250 Onboard Credit per Stateroom on Sailings of 14 or more nights.
  • $100 Onboard Credit per Stateroom on Sailings of 6 to 13 nights.
  • $50 Onboard Credit per Stateroom on Sailings of 5 nights or less.

Can I combine the shareholder discount with other discounts?

The shareholder benefit offer was updated in June 2019 and applies to bookings made on or after June 1, 2019.  With the June 2019 update, the shareholder benefit is easier to use in conjunction with a lot of promotions that it was not in the past.

Benefit is non-transferable and not available to employees, agents of Royal Caribbean Cruises Ltd. or its subsidiaries and affiliates, travel agents and tour operators. Benefit is not combinable with interline rates, travel agent rates, and employee friends and family rates. Benefit cannot be redeemed for chartered sailings, any Galapagos sailings or complimentary sailings.

Redeeming shareholder benefit

Provide your name, address, confirmation number, ship and sailing date along with a copy of your shareholder proxy card or a current brokerage statement showing proof of share ownership in Royal Caribbean Cruises, Ltd. All shareholder onboard credit requests must be received approximately 2 -3 weeks prior to sail date. Via Mail: RCL Investor Benefit Offer, PO Box 025511, Miami, Florida 33102-5511 Via Fax: 1-305-373-6699 Via Email: [email protected]

Please direct all inquiries to the Shareholder Benefit Team: (954) 628-9325, option #3

Royal Caribbean a great investment

In:
11Jun2010

For all you financial mavens out there, there's good some good news.  It turns out that while we all enjoy our cruises aboard Royal Caribbean, it's actually a good company to invest in (beyond the money you're already giving them for your next cruise!).  SmartTrend ranked Royal Caribbean (RCL) as the best investment in the top five companies in the Hotels, Resorts & Cruise Lines industry as measured by relative performance.

  • Royal Caribbean Cruises (NYSE:RCL) ranks first with a gain of 6.5%
  • Wyndham Worldwide (NYSE:WYN) ranks second with a gain of 5.31%
  • Home Inns & Hotels Management (NASDAQ:HMIN) ranks third with a gain of 4.95%.
  • Carnival (NYSE:CCL) follows with a gain of 4.67%
  • Gaylord Entertainment (NYSE:GET) rounds out the top five with a gain of 4.55%.
The news gets better as they also ranked Royal Caribbean in the top 5 stocks in the Hotels, Resorts & Cruise Lines industry as measured by the potential gains between the current stock price and the projected average analyst target
  • Great Wolf Resorts (NASDAQ:WOLF) has a potential upside of 121.2% based on a current price of $2.26 and an average consensus analyst price target of $5.
  • Red Lion Hotels (NYSE:RLH) has a potential upside of 40.4% based on a current price of $6.41 and an average consensus analyst price target of $9.
  • Gaylord Entertainment (NYSE:GET) has a potential upside of 35.7% based on a current price of $24.37 and an average consensus analyst price target of $33.06.
  • Royal Caribbean Cruises (NYSE:RCL) has a potential upside of 35.7% based on a current price of $28.52 and an average consensus analyst price target of $38.69.
  • Morgans Hotel (NASDAQ:MHGC) has a potential upside of 29.1% based on a current price of $7.02 and an average consensus analyst price target of $9.06.
If you were not already aware, being a Royal Caribbean stockholder does get you a discount on cruises so there's another good reason to buy stock in Royal Caribbean.  Of course, please don't rely on this blog for investment advice, we're just passing along the info (we also cheated our way through algebra)!