Contrasting Lucky Strike Entertainment (NYSE:LUCK) & Carnival (NYSE:CUK)

Lucky Strike Entertainment (NYSE:LUCK) and Carnival (NYSE:CUK) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Institutional and Insider Ownership

68.1% of Lucky Strike Entertainment shares are owned by institutional investors. Comparatively, 23.8% of Carnival shares are owned by institutional investors. 84.2% of Lucky Strike Entertainment shares are owned by insiders. Comparatively, 0.1% of Carnival shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Lucky Strike Entertainment and Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lucky Strike Entertainment	-7.09%	N/A	-2.74%
Carnival	10.37%	28.39%	6.09%

Dividends

Lucky Strike Entertainment pays an annual dividend of $0.24 per share and has a dividend yield of 2.9%. Carnival pays an annual dividend of $0.15 per share and has a dividend yield of 0.5%. Lucky Strike Entertainment pays out -36.9% of its earnings in the form of a dividend. Carnival pays out 7.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lucky Strike Entertainment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Lucky Strike Entertainment has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Carnival has a beta of 2.46, indicating that its share price is 146% more volatile than the S&P 500.

Earnings and Valuation

This table compares Lucky Strike Entertainment and Carnival”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lucky Strike Entertainment	$1.20 billion	0.96	-$10.02 million	($0.65)	-12.91
Carnival	$26.62 billion	0.22	$2.76 billion	$2.00	15.73

Carnival has higher revenue and earnings than Lucky Strike Entertainment. Lucky Strike Entertainment is trading at a lower price-to-earnings ratio than Carnival, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Lucky Strike Entertainment and Carnival, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lucky Strike Entertainment	1	4	4	0	2.33
Carnival	0	2	0	0	2.00

Lucky Strike Entertainment currently has a consensus target price of $11.64, suggesting a potential upside of 38.77%. Given Lucky Strike Entertainment’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Lucky Strike Entertainment is more favorable than Carnival.

About Lucky Strike Entertainment

Lucky Strike Entertainment Corp. engages in operating bowling centers. It offers entertainment concepts with lounge seating, arcades, food and beverage offerings, and hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The company was founded by Thomas F. Shannon in 1997 and is headquartered in Mechanicsville, VA.

About Carnival

Carnival Plc operates as a global cruise and vacation company. The firm offers holiday and vacation products to a customer base that is broadly varied in terms of cultures, languages and leisure-time preferences. It operates through the North America and Australia (NAA), Europe and Asia (EA), Cruise Support, and Tour and Other segments. The NAA segment includes Carnival Cruise Line, Holland America Line, P and O Cruises (Australia), Princess and Seabourn. The EA segment includes AIDA, Costa, Cunard, and P and O Cruises (UK). The Cruise Support segment includes a portfolio of port destinations and other services, all of which are operated for the benefit of cruise brands. The Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. The company was founded on July 19, 2000 and is headquartered in Southampton, the United Kingdom.