Critical Review: Norwegian Cruise Line (NYSE:NCLH) versus Six Flags Entertainment (NYSE:FUN)

Six Flags Entertainment (NYSE:FUN) and Norwegian Cruise Line (NYSE:NCLH) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Earnings & Valuation

This table compares Six Flags Entertainment and Norwegian Cruise Line”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Six Flags Entertainment	$2.71 billion	0.65	-$231.16 million	($17.72)	-0.98
Norwegian Cruise Line	$9.48 billion	1.00	$910.26 million	$1.36	15.38

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

Profitability

This table compares Six Flags Entertainment and Norwegian Cruise Line’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Six Flags Entertainment	-56.44%	9.64%	1.70%
Norwegian Cruise Line	6.85%	55.51%	4.31%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Six Flags Entertainment and Norwegian Cruise Line, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Six Flags Entertainment	2	4	9	0	2.47
Norwegian Cruise Line	0	10	11	2	2.65

Six Flags Entertainment presently has a consensus target price of $27.50, indicating a potential upside of 59.01%. Norwegian Cruise Line has a consensus target price of $27.05, indicating a potential upside of 29.34%. Given Six Flags Entertainment’s higher possible upside, research analysts plainly believe Six Flags Entertainment is more favorable than Norwegian Cruise Line.

Insider & Institutional Ownership

64.7% of Six Flags Entertainment shares are held by institutional investors. Comparatively, 69.6% of Norwegian Cruise Line shares are held by institutional investors. 1.8% of Six Flags Entertainment shares are held by insiders. Comparatively, 0.4% of Norwegian Cruise Line shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Six Flags Entertainment has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Norwegian Cruise Line has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500.

Summary

Norwegian Cruise Line beats Six Flags Entertainment on 13 of the 15 factors compared between the two stocks.

About Six Flags Entertainment

Cedar Fair, L.P. owns and operates amusement and water parks, as well as complementary resort facilities. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott's Berry Farm near Los Angeles, California; Canada's Wonderland near Toronto, Ontario; Kings Island near Cincinnati, Ohio; Carowinds in Charlotte, North Carolina; Kings Dominion situated near Richmond, Virginia; California's Great America located in Santa Clara, California; Dorney Park in Pennsylvania; Worlds of Fun located in Kansas City, Missouri; Valleyfair situated near Minneapolis/St. Paul, Minnesota; Michigan's Adventure situated near Muskegon, Michigan; Schlitterbahn Waterpark & Resort New Braunfels in New Braunfels, Texas; and Schlitterbahn Waterpark Galveston in Galveston, Texas. The company also owns and operates the Castaway Bay Indoor Waterpark Resort, Hotel Breakers, Cedar Point's Express Hotel, and Sawmill Creek Resort. Cedar Fair, L.P. was founded in 1983 and is based in Sandusky, Ohio.

About Norwegian Cruise Line

Norwegian Cruise Line Holdings Ltd., together with its subsidiaries, operates as a cruise company in North America, Europe, the Asia-Pacific, and internationally. The company operates through the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. It offers itineraries ranging from three days to a 180-days calling on various ports, including Scandinavia, Northern Europe, the Mediterranean, the Greek Isles, Alaska, Canada and New England, Hawaii, Asia, Tahiti and the South Pacific, Australia and New Zealand, Africa, India, South America, the Panama Canal, and the Caribbean. It distributes its products through retail/travel advisor and onboard cruise sales channels, as well as meetings, incentives, and charters. Norwegian Cruise Line Holdings Ltd. was founded in 1966 and is based in Miami, Florida.