Royal Caribbean Cruises (NYSE:RCL) & RCI Hospitality (NASDAQ:RICK) Head to Head Review

Royal Caribbean Cruises (NYSE:RCL) and RCI Hospitality (NASDAQ:RICK) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Dividends

Royal Caribbean Cruises pays an annual dividend of $4.00 per share and has a dividend yield of 1.2%. RCI Hospitality pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Royal Caribbean Cruises pays out 25.6% of its earnings in the form of a dividend. RCI Hospitality pays out 15.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Royal Caribbean Cruises has raised its dividend for 1 consecutive years and RCI Hospitality has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Royal Caribbean Cruises and RCI Hospitality, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Caribbean Cruises	0	4	18	1	2.87
RCI Hospitality	1	0	1	0	2.00

Royal Caribbean Cruises presently has a consensus target price of $348.29, suggesting a potential upside of 7.73%. RCI Hospitality has a consensus target price of $98.00, suggesting a potential upside of 327.39%. Given RCI Hospitality’s higher probable upside, analysts plainly believe RCI Hospitality is more favorable than Royal Caribbean Cruises.

Volatility & Risk

Royal Caribbean Cruises has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares Royal Caribbean Cruises and RCI Hospitality”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Caribbean Cruises	$17.94 billion	4.88	$4.27 billion	$15.61	20.71
RCI Hospitality	$295.60 million	0.68	$3.01 million	$1.86	12.33

Royal Caribbean Cruises has higher revenue and earnings than RCI Hospitality. RCI Hospitality is trading at a lower price-to-earnings ratio than Royal Caribbean Cruises, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Royal Caribbean Cruises and RCI Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Caribbean Cruises	23.80%	45.06%	10.87%
RCI Hospitality	5.88%	6.19%	2.81%

Institutional & Insider Ownership

87.5% of Royal Caribbean Cruises shares are owned by institutional investors. Comparatively, 53.8% of RCI Hospitality shares are owned by institutional investors. 7.0% of Royal Caribbean Cruises shares are owned by insiders. Comparatively, 9.6% of RCI Hospitality shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Royal Caribbean Cruises beats RCI Hospitality on 14 of the 18 factors compared between the two stocks.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.