Financial Analysis: KNOT Offshore Partners (KNOP) vs. Royal Caribbean Cruises (RCL)
KNOT Offshore Partners (NYSE:KNOP) and Royal Caribbean Cruises (NYSE:RCL) are both transportation companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.
Earnings & Valuation
This table compares KNOT Offshore Partners and Royal Caribbean Cruises’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|KNOT Offshore Partners||$219.20 million||2.75||$66.90 million||$2.26||8.15|
|Royal Caribbean Cruises||$9.49 billion||2.59||$1.81 billion||$8.86||13.30|
Volatility and Risk
KNOT Offshore Partners has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Royal Caribbean Cruises has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.
KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 11.3%. Royal Caribbean Cruises pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. KNOT Offshore Partners pays out 92.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Royal Caribbean Cruises pays out 31.6% of its earnings in the form of a dividend. Royal Caribbean Cruises has increased its dividend for 7 consecutive years.
This is a summary of recent ratings for KNOT Offshore Partners and Royal Caribbean Cruises, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KNOT Offshore Partners||0||1||0||0||2.00|
|Royal Caribbean Cruises||0||3||10||0||2.77|
KNOT Offshore Partners presently has a consensus target price of $21.00, indicating a potential upside of 13.94%. Royal Caribbean Cruises has a consensus target price of $140.64, indicating a potential upside of 19.35%. Given Royal Caribbean Cruises’ stronger consensus rating and higher possible upside, analysts plainly believe Royal Caribbean Cruises is more favorable than KNOT Offshore Partners.
This table compares KNOT Offshore Partners and Royal Caribbean Cruises’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KNOT Offshore Partners||34.05%||14.16%||4.93%|
|Royal Caribbean Cruises||19.08%||17.08%||7.29%|
Institutional and Insider Ownership
39.8% of KNOT Offshore Partners shares are owned by institutional investors. Comparatively, 71.8% of Royal Caribbean Cruises shares are owned by institutional investors. 15.3% of Royal Caribbean Cruises shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Royal Caribbean Cruises beats KNOT Offshore Partners on 14 of the 17 factors compared between the two stocks.
About KNOT Offshore Partners
KNOT Offshore Partners LP owns and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company loading, transportation and storage of their crude oil services under time charters and bareboat charters. As of April 25, 2018, it had a fleet of 16 shuttle tankers. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.
About Royal Caribbean Cruises
Royal Caribbean Cruises Ltd. operates as a cruise company. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises brands. The Royal Caribbean International brand provides itineraries to destinations worldwide, including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal, and New Zealand with cruise lengths that range from 2 to 23 nights. The Celebrity Cruises brand offers itineraries to destinations, such as Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, India, New Zealand, the Panama Canal, and South America with cruise lengths ranging from 2 to 19 nights. The Azamara Club Cruises brand offers cruise itineraries ranging from 4 to 21 nights to destinations, including Asia, Australia/New Zealand, Northern and Western Europe, the Mediterranean, Central and North America, and the less-traveled islands of the Caribbean. As of December 31, 2017, the company operated 49 ships with itineraries ranging from 2 to 23 nights to approximately 540 destinations. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.
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