Financial Analysis: Marriot Vacations Worldwide Corporation (VAC) versus Norwegian Cruise Line Holdings (NCLH)

Norwegian Cruise Line Holdings (NASDAQ: NCLH) and Marriot Vacations Worldwide Corporation (NYSE:VAC) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitabiliy, dividends, earnings and valuation.

Earnings & Valuation

This table compares Norwegian Cruise Line Holdings and Marriot Vacations Worldwide Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Norwegian Cruise Line Holdings $4.95 billion 2.44 $1.39 billion $2.73 19.38
Marriot Vacations Worldwide Corporation $1.30 billion 2.52 $255.26 million $5.24 23.07

Norwegian Cruise Line Holdings has higher revenue and earnings than Marriot Vacations Worldwide Corporation. Norwegian Cruise Line Holdings is trading at a lower price-to-earnings ratio than Marriot Vacations Worldwide Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Norwegian Cruise Line Holdings and Marriot Vacations Worldwide Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Norwegian Cruise Line Holdings 12.57% 16.76% 5.75%
Marriot Vacations Worldwide Corporation 7.76% 16.04% 6.08%

Insider & Institutional Ownership

86.1% of Norwegian Cruise Line Holdings shares are owned by institutional investors. Comparatively, 79.6% of Marriot Vacations Worldwide Corporation shares are owned by institutional investors. 1.0% of Norwegian Cruise Line Holdings shares are owned by company insiders. Comparatively, 3.3% of Marriot Vacations Worldwide Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Norwegian Cruise Line Holdings has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Marriot Vacations Worldwide Corporation has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Dividends

Marriot Vacations Worldwide Corporation pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. Norwegian Cruise Line Holdings does not pay a dividend. Marriot Vacations Worldwide Corporation pays out 26.7% of its earnings in the form of a dividend. Norwegian Cruise Line Holdings has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Norwegian Cruise Line Holdings and Marriot Vacations Worldwide Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Norwegian Cruise Line Holdings 0 7 5 0 2.42
Marriot Vacations Worldwide Corporation 0 2 4 0 2.67

Norwegian Cruise Line Holdings presently has a consensus price target of $49.73, indicating a potential downside of 6.00%. Marriot Vacations Worldwide Corporation has a consensus price target of $105.67, indicating a potential downside of 12.60%. Given Norwegian Cruise Line Holdings’ higher possible upside, equities analysts clearly believe Norwegian Cruise Line Holdings is more favorable than Marriot Vacations Worldwide Corporation.

Summary

Norwegian Cruise Line Holdings beats Marriot Vacations Worldwide Corporation on 9 of the 16 factors compared between the two stocks.

About Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings Ltd. (NCLH) is a global cruise company. The Company operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. The Company had 25 ships with approximately 50,400 Berths, as of May 1, 2017. The Company’s brands offer itineraries to various destinations around the world, including Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, Caribbean, Alaska and Hawaii. The Company’s brands offer various features, amenities, and activities, including various accommodations, multiple dining venues, bars and lounges, spa, casino and retail shopping areas and various entertainment choices. All the brands offer a selection of shore excursions at each port of call, as well as hotel packages for stays before or after a voyage. As of December 31, 2016, its Norwegian offered 14 ships that were purpose-built to deliver the Freestyle Cruising product, which offered freedom, flexibility and choice to its guests.

About Marriot Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation focuses on vacation ownership, based on number of owners, number of resorts and revenues. The Company is an exclusive worldwide developer, marketer, seller and manager of vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Company operates through three segments North America, Europe and Asia Pacific. In the North America segment, it develops, markets, sells and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. Its Europe segment is engaged in selling its existing projects and managing existing resorts. Its Asia Pacific segment, it develops, markets, sells and manages two points-based programs that it designed to appeal to the vacation preferences of the market, Marriott Vacation Club, Asia Pacific and Marriott Vacation Club Destinations, Australia, as well as a weeks-based right-to-use product.

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