Carnival (NYSE: BIP) and Brookfield Infrastructure Partners (NYSE:BIP) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Institutional and Insider Ownership

77.1% of Carnival shares are owned by institutional investors. Comparatively, 38.5% of Brookfield Infrastructure Partners shares are owned by institutional investors. 23.8% of Carnival shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Carnival and Brookfield Infrastructure Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carnival 0 5 12 0 2.71
Brookfield Infrastructure Partners 0 0 9 0 3.00

Carnival currently has a consensus target price of $74.53, indicating a potential upside of 21.73%. Brookfield Infrastructure Partners has a consensus target price of $47.38, indicating a potential upside of 17.26%. Given Carnival’s higher possible upside, equities analysts clearly believe Carnival is more favorable than Brookfield Infrastructure Partners.

Profitability

This table compares Carnival and Brookfield Infrastructure Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carnival 15.40% 12.31% 7.21%
Brookfield Infrastructure Partners 8.25% 3.29% 1.42%

Dividends

Carnival pays an annual dividend of $2.00 per share and has a dividend yield of 3.3%. Brookfield Infrastructure Partners pays an annual dividend of $1.88 per share and has a dividend yield of 4.7%. Carnival pays out 52.4% of its earnings in the form of a dividend. Brookfield Infrastructure Partners pays out 124.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Carnival has raised its dividend for 3 consecutive years and Brookfield Infrastructure Partners has raised its dividend for 8 consecutive years. Brookfield Infrastructure Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Carnival has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Brookfield Infrastructure Partners has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Carnival and Brookfield Infrastructure Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carnival $17.51 billion 1.86 $2.61 billion $3.82 16.03
Brookfield Infrastructure Partners $3.54 billion 3.95 $124.00 million $1.51 26.75

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

Summary

Carnival beats Brookfield Infrastructure Partners on 11 of the 17 factors compared between the two stocks.

About Carnival

Carnival Corporation operates as a leisure travel and cruise company. It offers cruises under the Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn brands in North America; and AIDA, Costa, P&O Cruises (Australia), Cunard, and P&O Cruises (UK) brands in Europe, Australia, and Asia. The company operates approximately 100 cruise ships. It also owns Holland America Princess Alaska Tours, a tour company in Alaska; and the Canadian Yukon, which owns and operates hotels, lodges, glass-domed railcars, and motor coaches. In addition, the company is involved in the lease of cruise ships. It sells its cruises primarily through travel agents and tour operators. The company was incorporated in 1972 and is headquartered in Miami, Florida. Carnival Corporation is a subsidiary of Carnival Corporation & plc.

About Brookfield Infrastructure Partners

Brookfield Infrastructure Partners L.P. engages in utility, transport, energy, and communications infrastructure businesses. The company's Utilities segment operates approximately 2,000 kilometers (km) of natural gas transportation pipelines in the states of Rio de Janeiro, Sao Paulo, and Minas Gerais; approximately 12,000 km of electricity transmission lines in North and South America; approximately 3.3 million electricity and natural gas connections in the United Kingdom and Colombia; and a port facility that exports metallurgical and thermal coal in Australia. Its Transport segment offers transportation, storage, and handling services for freight, bulk commodities, and passengers through a network of 5,500 km of track network in south of Western Australia; approximately 4,800 km of rail in South America; approximately 4,000 km of motorways in Brazil, Chile, Peru, and India; and 37 port terminals in North America, the United Kingdom, Australia, and Europe. The company's Energy segment offers energy transportation, distribution, and storage services through approximately 15,000 km of natural gas transmission pipelines; and 600 billion cubic feet of natural gas storage in the United States and Canada. This segment also provides heating, cooling, and energy solutions; and distributed natural gas, water, and wastewater services to approximately 59,000 commercial and residential customers. Its Communications Infrastructure segment offers services and critical infrastructure to the media broadcasting and telecom sectors. It has approximately 7,000 multi-purpose towers and active rooftop sites; and 5,000 km of fiber backbone located in France. Brookfield Infrastructure Partners Limited serves as the general partner of the company. Brookfield Infrastructure Partners L.P. was founded in 2007 and is based in Hamilton, Bermuda. The company is a subsidiary of Brookfield Asset Management Inc.

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