It’s safe to say that cruise companies are finding things pretty tough right now. COVID-19 is pretty much shutting down holidays left right and centre. As such, some of the biggest cruise operators, such as Carnival, are having to swallow a pretty bitter pill.
So too, of course, are those people who already have shares in travel companies. It’s not a good time to have your money invested in the travel sector.
However, there is such a thing as market recovery. Is it worth investing in Carnival with the view to the company recovering after lockdown ends? Possibly. On top of this, you may also be wondering, why does Carnival have two separate stocks?
Given that most of us could do with a holiday right now, I thought I’d dive deep into the world of cruise shares – specifically those belonging to Carnival cruise lines – and take a look at how the travel sector is responding in terms of shares and markets.
Why does Carnival have two stocks?
So – what’s the deal with CCL vs CUK? Why does Carnival have two stocks to its name? It’s all to do with where Carnival shares are likely to trade. CCL is the name of the stock you’ll find based in the US, while you’ll find CUK, representing Carnival PLC, in the UK.
However, you can actually trade in both stocks, if you want to.
What’s the difference between CCL and CUK?
The main difference, is to do with location – however, there’s also a large gulf in terms of the price, too. CCL, for example, generally trades more expensively than CUK might. However, in the past, the PLC stock has traded higher, though this changed around following company mergers in the early 00s.
One reason why you might find one stock more expensive than the other revolves around how each local stock market is performing. There are times where CUK, for example, might be more lucrative if the London Stock Exchange is proving to be more popular.
Therefore, it is always worth looking for both stocks in the cruise ship giant. That, at least, was the case until COVID-19 changed the industry for good.
Will Carnival stock recover?
It’s not so easy to say. Of course, market recovery is likely to sweep in for many industries. The travel industry, however, is taking a real beating. This means that, at least at present, Carnival’s stocks are sinking.
Recent news suggests that the company has needed to rely on public investment pleas to be able to stay afloat. This means that stock in either CUK or CCL are likely trading at around 20% of their value from a few months ago. This is a large bite out of the company’s financial presence, and while the industry is generally facing catastrophe, Carnival might be one brand looking to bubble under.
Various trading experts suggest that the company’s recent stock market endeavours indicate that the stock value they once enjoyed might not bounce back again. However, this is not to say that the company won’t continue trading; as such extreme financial and foreclosure measures are a long way off at the time of writing.
Bonds served up by Carnival recently appeared to indicate a company starting to struggle. This, of course, is hardly likely to offer much confidence to traders. Some shareholders even find that assets through Carnival are serving up on a mortgage basis – hardly likely to be comfortable reading in the financial press the day after.
Which Carnival stock should you buy?
At present, it might be best to hold off altogether – even if you do have designs on investing in RCL or other liners in the near future. You need to have serious confidence in market recovery for these shares and stocks to be worth your investment.
Sources such as The Motley Fool suggest that it is generally worth opting for the cheaper stock available. This, of course, may be CCL or CUK at any given moment. The Fool even suggests that if Carnival shares are able to weather the storms of the pandemic, traders might just be in for a windfall after lockdown ends. That, at least, would be a nice surprise.
I happen to agree with The Fool’s assessment here. CUK at present seems to be offering a healthy discount, and if you have faith that the company will rebound from the pandemic in the long term, it’s likely better to head for London at this moment in time, particularly if you really want to make the most of the stock in the long run.
Does CCL pay dividends?
Yes. On the whole, CCL will pay dividends on a quarterly basis. However, according to inside statistics, it has emerged that holders can expect further payment in December 2020.
This, it is hoped and presumed, will transpire after the end of lockdown conditions. However, as COVID-19 remains such an unknown entity, this is, of course, pure guesswork.
Do Carnival shareholders get cruise discounts?
This is likely to be a question many prospective shareholders ask, and for good reason. There are many benefits in trading in CCL or CUK. Specifically, owning shares with the brand will grant you a certain amount of credit to use on board cruise liners. Specifically, it’s stated that you will receive $250 (equivalent) to use on board Carnival ships for every 100 shares you possess.
Therefore, if you are likely to take an active interest in cruise holidays post-lockdown, investing and investigating stock with the company is likely to work out well for you. Of course, as stated, recent bond offerings brought even more shareholder perks to the table, though at the expense of many assets and their general protection.
Of course, all the above relies on whether or not the company will ride the markets heading out of the pandemic. Experts suggest we won’t see the heights of stock value at Carnival ever again.
Unfortunately, share prices are always likely to go south during a financial crisis, and as such, it remains to be seen whether or not your on board credits are actually going to be worth it. If we’re staying at home for much longer, Carnival’s liners could be left docking for time to come.
Will CCL go out of business?
It’s too early to say. Economic recovery, in the holiday industry and elsewhere, is not always easy to predict. The pandemic has presented a huge array of obstacles the likes of which we’ve never seen before.
Carnival is one of many companies trying to keep its neck above water by offering travel stocks with extra perks and features. If you were already set to buy shares in CCL or CUK, it’s worth keeping an eye on the news.
Is now a good time to buy CCL or CUK stock?
Carnival Cruise Lines is a big name in the travel industry which seems infallible. However, there are plenty of good reasons why cruise stocks are sinking under right now. Various countries are slackening lockdowns, however, none of us really know where we are heading to.
If you already have faith in Carnival stock, and have multiple shares in travel companies (such as NYSE RCL offerings), you might be in a better position to ride out the storm. For now, however, tread carefully. It might be worth buying Carnival stock for the immediate benefits, however, we will have to see if the travel sector heals significantly enough for stock purchasing to really be worth it.
It’s not just Carnival you’ll have to watch. Plenty of North American cruise operators, for example, are feeling trepidation over what comes next. What’s more, you’re going to need to keep an eye on what Royal Caribbean and Norwegian cruises are offering, too. That’s not to say you should opt for Norwegian Cruise Line Holdings stock over Carnival stock – but it’s worth looking at what the industry expectations are from several different angles.