By Rob Otman
Carnival (NYSE: CCL) is a large cap company that operates within the hotels, restaurants and leisure industry. Its market cap is $47 billion today, and the total one-year return is 27.56% for shareholders.
Carnival stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
[iu-adbox]
✓ Earnings-per-Share (EPS) Growth: Carnival reported a recent EPS growth rate of -4.66%. That’s above the hotels, restaurants and leisure industry average of -1059%. That’s a great sign. Carnival’s earnings growth is outpacing that of its competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the hotels, restaurants and leisure industry is 29.92. And Carnival’s ratio comes in at 16.93. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Carnival stock is 37.94%. That’s below the hotels, restaurants and leisure industry average of 190.83%. The company is less leveraged.
✗ Free Cash Flow per Share Growth: Carnival’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of Carnival comes in at 24.1% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Carnival’s profit margin is above the hotels, restaurants and leisure average of 13%. So that’s a positive indicator for investors.
✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Carnival is 11.34%, and that’s below its industry average ROE of 21.17%.
Carnival stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more. …read more
Source:: Investment You
The post Should You Buy Carnival Stock Before Earnings? appeared first on Junior Mining Analyst.