Reviewing Starbucks (NASDAQ:SBUX) and Norwegian Cruise Line (NYSE:NCLH)

Norwegian Cruise Line (NYSE:NCLH) and Starbucks (NASDAQ:SBUX) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Norwegian Cruise Line and Starbucks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norwegian Cruise Line	8.20%	34.28%	3.76%
Starbucks	6.66%	-38.61%	10.40%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Norwegian Cruise Line and Starbucks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norwegian Cruise Line	1	16	7	1	2.32
Starbucks	4	15	21	0	2.42

Norwegian Cruise Line currently has a consensus price target of $20.18, indicating a potential upside of 12.46%. Starbucks has a consensus price target of $108.83, indicating a potential upside of 2.24%. Given Norwegian Cruise Line’s higher possible upside, research analysts plainly believe Norwegian Cruise Line is more favorable than Starbucks.

Volatility and Risk

Norwegian Cruise Line has a beta of 1.99, indicating that its stock price is 99% more volatile than the S&P 500. Comparatively, Starbucks has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Valuation & Earnings

This table compares Norwegian Cruise Line and Starbucks”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norwegian Cruise Line	$9.83 billion	0.84	$423.25 million	$1.81	9.91
Starbucks	$37.91 billion	3.20	$2.53 billion	$2.21	48.16

Starbucks has higher revenue and earnings than Norwegian Cruise Line. Norwegian Cruise Line is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

69.6% of Norwegian Cruise Line shares are held by institutional investors. Comparatively, 72.3% of Starbucks shares are held by institutional investors. 0.3% of Norwegian Cruise Line shares are held by company insiders. Comparatively, 0.0% of Starbucks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Starbucks beats Norwegian Cruise Line on 9 of the 15 factors compared between the two stocks.

About Norwegian Cruise Line

Norwegian Cruise Line Holdings Ltd. is a global cruise company that operates three brands: Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. Its businesses provide cruise vacations, including onboard dining, entertainment and other guest services, as well as shore excursions at destinations on their itineraries. Norwegian Cruise Line offers contemporary cruise experiences, while Oceania Cruises focuses on destination-oriented travel and cuisine. Regent Seven Seas Cruises offers an all-inclusive luxury cruise experience.

About Starbucks

Starbucks Corporation is a global coffee company that roasts, markets and sells coffee and other beverages, along with food and related merchandise. Its offerings include brewed coffee, espresso-based drinks, teas and packaged coffee products. The company serves customers through company-operated and licensed stores, as well as through retail and food-service partnerships. Its stores also sell items such as mugs and coffee-making equipment. Founded in Seattle in 1971, Starbucks operates in North America and international markets, including China.