My High Dividend Stocks Blog http://myhighdividendstocks.posterous.com Most recent posts at My High Dividend Stocks Blog posterous.com Tue, 17 Jan 2012 11:57:14 -0800 Carnival Corp. (CCL) is listing to port. How low will it sink? http://myhighdividendstocks.posterous.com/carnival-corp-ccl-is-listing-to-port-how-low http://myhighdividendstocks.posterous.com/carnival-corp-ccl-is-listing-to-port-how-low

Most people have heard about the grounding of the cruise ship Costa Concordia.  If you haven’t, then follow this link: http://tinyurl.com/7b596qk.

Carnival Corp. (CCL) is the parent corporation of the Costa Concordia.  Putting aside the human tragedy of the grounding, Carnival estimates that it will lose at least $85 - $95 million or $0.11 - $0.12 per share.

http://www.sacbee.com/2012/01/15/4190934/carnival-corporation-plc-required.html

I wrote one article on Carnival that said the stock should not be bought above $21.68 (http://www.myhighdividendstocks.com/stocks-that-pay-small-dividends/first-look-at-carnival-corporation-ccl).  That price was before the grounding of the Costa Concordia.  I think that Carnival was already heading lower due to the oncoming double dip recession.  Look at the March 2009 lows.  The ship wreck and ensuing fallout will only make matters worse for Carnival.

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DISCLOSURE – I don’t own Carnival Corp. (CCL)

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http://files.posterous.com/user_profile_pics/697493/v_for_vendetta_guy_fawkes_mask11.jpg http://posterous.com/users/4wuf4tt8LZzb Jason Brizic myhighdividendstocks Jason Brizic
Mon, 17 Oct 2011 16:02:02 -0700 First look at Carnival Corporation (CCL) http://myhighdividendstocks.posterous.com/first-look-at-carnival-corporation-ccl http://myhighdividendstocks.posterous.com/first-look-at-carnival-corporation-ccl

I recently took a cruise vacation to Mexico on Carnival Cruise Lines (CCL).  This was my third cruise on Carnival spanning over a decade and I had a wonderful experience each time.  I will cruise with them again.  They treat their returning clients well.  This got me thinking about the company as an investment.

I was pleased to find out that Carnival has a decent dividend yield of 3.0%

Carnival Corporation (CCL)

Market price: $33.25

Shares: 778.42 million

Market capitalization: $25.88 billion

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DIVIDEND RECORD

Carnival was a dividend grower until 2009.  They eliminated their dividend for the year of 2009.  In 2010, they began paying a $0.10 quarterly dividend.  Now they are paying a $0.25 quarterly dividend.

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Dividend: $0.25 quarterly

Dividend yield: 3.0%  ($1.00 annual dividend/$33.25 market price)

Dividend payout ratio: 40.8% ($1.00 annual dividend/$2.45 EPS according to Google Finance)

Carnival would become a 6% high dividend stock if its market price dropped to $16.66 if they kept their current dividend the same.

EARNING POWER

(Earnings adjusted for changes in market capitalization)

            EPS       Net inc.             Shares               Adj EPS

2006     $2.77    $2,279 M           823 M                $2.93

2007     $2.95    $2,408 M           828 M                $3.09

2008     $2.90    $2,330 M           816 M                $2.99

2009     $2.24    $1,790 M           804 M                $2.30

2010     $2.47    $1,978 M           778.42 M           $2.54

2011E   $2.45E                                                  $2.45E

Six year average adjusted EPS = $2.71

Consider contrarian buying below $21.68 (less than 8 times average EPS)

Consider value buying below $32.52 (less than 12 times average EPS)

Consider investment buying between $32.53 and $54.19 (between 12 times and 20 times average EPS)

Consider speculative selling above $54.20 (above 20 times average EPS)

BALANCE SHEET STRENGTH

I’m concerned about their low current ratio and quick ratios.  They don’t have much current assets or cash assets to pay short term liabilities.  This needs to be investigated before making a buy.

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Book value per share: $31.12

Price to BV ratio: 1.06 (good)

Current ratio: 0.22 (over 2.0 is good)

Quick ratio: 0.11 (over 1.0 is good)

CONCLUSION

Wait for a low price below $21.68 after the US recession sets in.  They will revisit the 2008-2009 lows.

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DISCLOSURE – I don’t own Carnival Corporation (CCL)

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