Lucky Strike Entertainment (NYSE:LUCK) and Carnival (NYSE:CCL) Critical Contrast

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

Volatility & Risk

Carnival has a beta of 2.42, meaning that its share price is 142% more volatile than the S&P 500. Comparatively, Lucky Strike Entertainment has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carnival	11.48%	26.92%	6.20%
Lucky Strike Entertainment	-7.09%	N/A	-2.74%

Institutional & Insider Ownership

67.2% of Carnival shares are held by institutional investors. Comparatively, 68.1% of Lucky Strike Entertainment shares are held by institutional investors. 7.9% of Carnival shares are held by company insiders. Comparatively, 84.2% of Lucky Strike Entertainment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Carnival pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Lucky Strike Entertainment pays an annual dividend of $0.24 per share and has a dividend yield of 2.8%. Carnival pays out 26.7% of its earnings in the form of a dividend. Lucky Strike Entertainment pays out -36.9% 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$26.98 billion	1.18	$2.76 billion	$2.25	11.40
Lucky Strike Entertainment	$1.24 billion	0.96	-$10.02 million	($0.65)	-13.25

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 breakdown of recent ratings for Carnival and Lucky Strike Entertainment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	0	6	21	0	2.78
Lucky Strike Entertainment	1	4	4	0	2.33

Carnival currently has a consensus target price of $34.17, indicating a potential upside of 33.23%. Lucky Strike Entertainment has a consensus target price of $11.64, indicating a potential upside of 35.22%. Given Lucky Strike Entertainment’s higher probable upside, analysts clearly believe Lucky Strike Entertainment is more favorable than Carnival.

Summary

Carnival beats Lucky Strike Entertainment on 11 of the 16 factors compared between the two stocks.

About Carnival

Carnival Corp. engages in the operation of cruise ships. It operates through the following business segments: North America and Australia (NAA) Cruise, Europe and Asia (EA) Cruise Operations, Cruise Support, and Tour and Others. The North America and Australia (NAA) Cruise segment includes the Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn. The Europe and Asia (EA) Cruise Operations segment consists of AIDA, Costa, Cunard, and P&O Cruises (UK). The Cruise Support segment represents port destinations and private islands for the benefit of its cruise brands. The Tour and Other segment operates hotel and transportation operations of Holland America Princess Alaska Tours. The company was founded in 1972 and is headquartered in Miami, FL.

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.