On a planet whose surface consists mostly of water, it's not a surprise to see different companies cashing in on transporting guests across the many oceans, seas, and rivers. Carnival Corp. (CUK +1.69%) (CCL +1.99%) is the country's largest cruise line by fleet capacity and revenue. Viking Holdings (VIK +1.77%) is the leading provider of river expeditions.
The product may seem the same in theory. Carnival and Viking passengers board a boat, only to spend days if not weeks on a water journey with stops along the way. However, in terms of fundamentals, target audience, and even stock charts, they're far from being the same.
Set aside any bucket list sailings you might have in mind. As an investor, which stock is the best choice right now. Carnival? Viking? Let's hop aboard and see which of these passing ships is the better stock for you.
Image source: Getty Images.
Carnival knowledge
Carnival is not the world's most valuable cruise line operator. Smaller rival Royal Caribbean (RCL +2.88%) dons the market cap crown. It's also not necessarily the cheapest. Even smaller rival Norwegian Cruise Line (NCLH 0.44%) has the distinction of trading for the lowest forward P/E in the industry.
However, that doesn't mean Carnival isn't valuable or cheap. As the volume leader in an ascending travel niche, Carnival has a lot going for it these days. Investors saw this on display earlier this month, with the cruising bellwether soaring 10% after posting better-than-expected financial results.
Exceeding analyst expectations is old hat for Carnival. It has landed ahead of Wall Street profit targets consistently in recent years. The real mic drop moment for Carnival is that it has delivered at least double-digit percentage beats in 9 of its last 10 quarters. After a sluggish fiscal third quarter -- at least relative to its faster-growing competitors -- Carnival's top-line gains accelerated.
Carnival cruise stock is earning its way back into market fancy after being the last of the three major operators to return to profitability. In a big move this month, Carnival reinstated the quarterly dividend that it suspended at the start of the COVID-19 crisis. Its new dividend yield of 1.9% is greater than Royal Caribbean's 1.4% payout and Norwegian, which has never declared a cash distribution. Finally, Carnival is ahead of its smaller competitors in the hearts of income investors.
Analysts see revenue slowing to 4% growth for Carnival through the next two fiscal years, but with earnings growth in the pre-teens. The competition is growing faster, but you can also buy Carnival for just 12 times this new fiscal year's profit target. It's a great value proposition for a stock that is ending 2025 on a high note.
NYSE: CCL
Key Data Points
Viking conquests
Carnival operates mass market ships. Its cruises can accommodate thousands of passengers, and affordability is a major selling point. Viking is at the other end of the industry. Its most popular vessel is a narrow "longship" that serves fewer than 200 passengers. It offers an exclusive experience navigating across legendary rivers. It's not cheap. Viking is most definitely a luxury brand stock.
Viking's dominant position as the top dog in this niche for North American outbound passengers comes at a price. Thankfully for Viking and its shareholders, customers are willing to pay that price. Two months ago, Viking already had 70% of its bookings for next year already sold.
It's not just the cruises that aren't cheap. Viking is trading for 29 times forward earnings, more than twice the multiple that Carnival is commanding. Bulls will argue that it's worth the premium. In the same third quarter of this year that saw the three traditional cruise lines growing their businesses at a 3% to 5% clip -- with Carnival at the low end -- Viking's revenue soared 19%. In a scalable business, it's not a surprise to find Viking's bottom line growing even faster.
NYSE: VIK
Key Data Points
Pier pressure
You don't have to choose. The cruising market has momentum heading into 2026. Both Carnival and Viking have spent the past year jacking up their guidance. Both stocks should be able to beat the market, but you didn't come this far in this article to see a draw or a split decision.
Viking is the better stock. It's not perfect, and it actually falls short in one metric I mentioned that was favorable to Carnival. Remember Carnival's strong run of bottom-line beats? Viking had a good run of double-digit earnings beats, but it has clocked in flattish in its last two quarterly updates.
I'm still going with Viking. It is uniquely positioned, serving a wealthier and historically older audience that is less susceptible to an economic downturn. I can appreciate the significance of what Carnival achieved earlier this month. It saw its revenue growth nearly double sequentially in the fiscal fourth quarter. The new dividend is a great sign that Carnival sees stability in the near term. It wouldn't reinstate its payouts if it were just going to pull the gangway at the first whiff of trouble. Carnival is certainly intriguing, but Viking is the standout stock right now.
