The holiday season is here, and vacation time is around the corner! Having been on multiple cruises, I think it’s one of the best ways to spend the holidays. As the economy showing signs of growing, additional disposable income is steadily becoming available. This means consumers are leaning toward discretionary spending, such as travel. And, experiential travel is one of the top choices for vacation goers which bodes well for cruise stocks.
While the pandemic may have severely hurt the cruise industry, cruise companies have reported strong sales for their upcoming sailings. This could potentially mean a high rebound for the sector. While this is great, investors should still conduct their due diligence before jumping into cruise stocks. Here are three cruise stocks that we think investors should buy right now.
Royal Caribbean Group (RCL)
Royal Caribbean Group (NYSE:RCL), formerly known as Royal Caribbean Cruises, is a cruise company that owns global cruise brands: Royal Caribbean International, Silversea Cruises and Celebrity Cruises. The company offers a worldwide itinerary of approximately 1,000 destinations across all continents. The company recently announced the debut of the Icon of the Seas cruise ship as part of its Royal Caribbean brand, which will debut in Miami in January 2024.
RCL’s third-quarter results surpassed its EPS guidance due to robust demand and increased onboard revenue. This prompted the company to raise its full-year 2023 adjusted EPS guidance to capitalize on its growing demand. Royal Caribbean also reported its 2024 bookings have exceeded expectations with higher load factors and rates than the previous years. Its strategic investment, destination expansion and newer ships have overtaken the market and positioned RCL with a more substantial 2024 potential. Its growth promise and focus on its approach to debt reduction puts RCL at the top of our list of cruise stocks to buy.
Lindblad Expeditions Holdings (LIND)
Next on our list of cruise stocks is Lindblad Expeditions Holdings (NASDAQ:LIND), an expedition travel company specializing in ship-based voyages. It offers expeditions under two main segments. The first, Lindblad, mainly provides cruises that are operated by its nimble and intimately scaled vessels that offer up-close experiences to wildlife and capitals of culture. Land Experiences, on the other hand, offers its land-based adventure brands packaged tours centered around culture and nature. The company’s offerings include brands DuVine, Natural Habitat, Classic Journeys and Off the Beaten Path.
LIND ended its third quarter with a 22% revenue spike and an 83% surge in adjusted EBITDA. According to the company’s report, its Lindblad segment fueled the growth with a 30% rise in tour revenues. It also saw a 21% increase in guest nights and a 9% uptick in net yield per available guest night. Its growth is supported by additional future travel reservations.
CEO Sven Lindblad praised the company’s focus on expanded offerings and tech upgrades that help meet the growing demand for experiential travel. Its stock repurchase plan shows its management’s confidence in the stock despite its increase in debt. This approach to innovation and a solid commitment to shareholder value puts LIND into our cruise stocks to buy.
TripAdvisor (TRIP)
While not specifically a cruise stock, TripAdvisor (NASDAQ:TRIP) is one of the world’s most well-known online travel companies that cruisers love to use. It uses technology platforms that connect travelers with various service providers like restaurants, experience services, cruises and more, in its two-sided marketplace.
Operations are divided into three core segments, Viator, Tripadvisor Core and TheFork. The Tripadvisor core segment is the only platform that allows travelers to share user ratings and reviews ratings, accommodations, cruises and various services. Its Viator segment offers travelers diverse bookable experiences like cruises and trips in its platform as an online travel agency. Its TheFork segment, on the other hand, gives diners an option to book restaurant reservations in different countries.
TRIP reported a solid third quarter with a 16% year-over-year growth in revenue, net income of $27 million, and non-GAAP net income of $74 million, which the company attributes to its success in the experiences category. TRIP has also reported solid liquidity totaling $1.1 billion in cash and cash equivalents. Plus the company is demonstrating its commitment to shareholder value with its $250 million share repurchase program. Its strong financial health and potential for sustained growth make Trip Advisor a compelling cruise stock to buy.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
