Royal Caribbean Cruises (NYSE:RCL) vs. Reading International (NASDAQ:RDI) Financial Analysis

Reading International (NASDAQ:RDI) and Royal Caribbean Cruises (NYSE:RCL) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Profitability

This table compares Reading International and Royal Caribbean Cruises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reading International	-8.43%	N/A	-4.03%
Royal Caribbean Cruises	24.36%	45.25%	11.13%

Risk & Volatility

Reading International has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Royal Caribbean Cruises has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500.

Institutional & Insider Ownership

44.7% of Reading International shares are owned by institutional investors. Comparatively, 87.5% of Royal Caribbean Cruises shares are owned by institutional investors. 32.4% of Reading International shares are owned by company insiders. Comparatively, 6.4% of Royal Caribbean Cruises shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Reading International and Royal Caribbean Cruises, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reading International	1	0	0	0	1.00
Royal Caribbean Cruises	1	5	14	1	2.71

Royal Caribbean Cruises has a consensus price target of $344.79, suggesting a potential upside of 22.41%. Given Royal Caribbean Cruises’ stronger consensus rating and higher possible upside, analysts plainly believe Royal Caribbean Cruises is more favorable than Reading International.

Valuation & Earnings

This table compares Reading International and Royal Caribbean Cruises”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reading International	$202.99 million	0.13	-$14.14 million	($0.77)	-1.52
Royal Caribbean Cruises	$17.94 billion	4.21	$4.27 billion	$16.39	17.19

Royal Caribbean Cruises has higher revenue and earnings than Reading International. Reading International 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.

Summary

Royal Caribbean Cruises beats Reading International on 14 of the 15 factors compared between the two stocks.

About Reading International

Reading International, Inc., together with its subsidiaries, focuses on the ownership, development, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. The company operates in two segments, Cinema Exhibition and Real Estate. The Cinema Exhibition segment operates multiplex cinemas. This segment operates its cinema exhibition businesses under the Reading Cinemas, Consolidated Theatres, Angelika Film Center, State Cinema by Angelika, Angelika Anywhere, Event Cinemas, and Rialto Cinemas brands. The Real Estate segment develops, rents, or licenses retail, commercial, and live theater assets. Reading International, Inc. was incorporated in 1999 and is headquartered in New York, New York.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.