Shake Shack (NYSE:SHAK) versus Carnival (NYSE:CCL) Head to Head Review

Carnival (NYSE:CCL) and Shake Shack (NYSE:SHAK) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Carnival and Shake Shack, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	0	6	17	2	2.84
Shake Shack	0	12	16	0	2.57

Carnival presently has a consensus price target of $34.56, suggesting a potential upside of 56.40%. Shake Shack has a consensus price target of $89.71, suggesting a potential upside of 54.50%. Given Carnival’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Carnival is more favorable than Shake Shack.

Profitability

This table compares Carnival and Shake Shack’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carnival	11.24%	26.11%	6.36%
Shake Shack	2.56%	9.29%	2.71%

Valuation & Earnings

This table compares Carnival and Shake Shack”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$27.31 billion	1.11	$2.76 billion	$2.22	9.95
Shake Shack	$1.45 billion	1.72	$45.72 million	$0.94	61.77

Carnival has higher revenue and earnings than Shake Shack. Carnival is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

67.2% of Carnival shares are owned by institutional investors. Comparatively, 86.1% of Shake Shack shares are owned by institutional investors. 7.9% of Carnival shares are owned by insiders. Comparatively, 8.3% of Shake Shack shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Carnival has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500.

Summary

Carnival beats Shake Shack on 11 of the 15 factors compared between the two stocks.

About Carnival

Carnival Corp. engages in the operation of cruise ships. It operates through the following business segments: North America and Australia (NAA) Cruise, Europe and Asia (EA) Cruise Operations, Cruise Support, and Tour and Others. The North America and Australia (NAA) Cruise segment includes the Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn. The Europe and Asia (EA) Cruise Operations segment consists of AIDA, Costa, Cunard, and P&O Cruises (UK). The Cruise Support segment represents port destinations and private islands for the benefit of its cruise brands. The Tour and Other segment operates hotel and transportation operations of Holland America Princess Alaska Tours. The company was founded in 1972 and is headquartered in Miami, FL.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.