Reviewing Royal Caribbean Cruises (NYSE:RCL) and Life Time Group (NYSE:LTH)

Royal Caribbean Cruises (NYSE:RCL) and Life Time Group (NYSE:LTH) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings & Valuation

This table compares Royal Caribbean Cruises and Life Time Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Caribbean Cruises	$16.48 billion	4.94	$2.88 billion	$14.87	20.08
Life Time Group	$2.62 billion	2.34	$156.24 million	$1.29	21.52

Royal Caribbean Cruises has higher revenue and earnings than Life Time Group. Royal Caribbean Cruises is trading at a lower price-to-earnings ratio than Life Time Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.5% of Royal Caribbean Cruises shares are held by institutional investors. Comparatively, 79.4% of Life Time Group shares are held by institutional investors. 7.0% of Royal Caribbean Cruises shares are held by insiders. Comparatively, 8.7% of Life Time Group shares are held by 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Royal Caribbean Cruises and Life Time Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Caribbean Cruises	0	4	19	1	2.88
Life Time Group	0	6	10	0	2.63

Royal Caribbean Cruises currently has a consensus target price of $324.82, suggesting a potential upside of 8.77%. Life Time Group has a consensus target price of $37.00, suggesting a potential upside of 33.31%. Given Life Time Group’s higher possible upside, analysts plainly believe Life Time Group is more favorable than Royal Caribbean Cruises.

Profitability

This table compares Royal Caribbean Cruises and Life Time Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Caribbean Cruises	23.33%	44.68%	10.36%
Life Time Group	9.91%	9.75%	3.65%

Volatility & Risk

Royal Caribbean Cruises has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500. Comparatively, Life Time Group has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500.

Summary

Royal Caribbean Cruises beats Life Time Group on 12 of the 15 factors compared between the two stocks.

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.

About Life Time Group

Life Time Group Holdings, Inc. provides health, fitness, and wellness experiences to a community of individual members in the United States and Canada. It primarily engages in designing, building, and operating of sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment, principally in suburban and urban locations of metropolitan areas. The company also offers fitness floors with equipment, locker rooms, group fitness studios, indoor and outdoor pools, bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe, and childcare and Kids Academy learning spaces. In addition, its Life Time Digital provides live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, curated award-winning health, and fitness and wellness content. The company is also involved in media activities, conducting athletic events, and provision of related services. It operates various centers, including ground leases. The company was formerly known as LTF Holdings, Inc. and changed its name to Life Time Group Holdings, Inc. in June 21, 2021. Life Time Group Holdings, Inc. was founded in 1992 and is headquartered in Chanhassen, Minnesota.