April 19, 2025 a 11:30 am
CCL: Dividend Analysis - Carnival Corporation & plc
Carnival Corporation & plc, a leading name in the travel and leisure industry, presents a complex dividend profile shaped by unique market conditions and strategic decisions. Despite an impressive history of dividend payments spanning over three decades, recent years have revealed challenges, notably reflected by dividend cuts and suspensions. This analysis will delve into key financial metrics to evaluate the sustainability and future potential of Carnival's dividend offerings.
📊 Overview
Carnival Corporation & plc is part of the travel and leisure sector, characterized by its cyclical performance and sensitivity to economic conditions. The current dividend yield stands at 4.71%, though the company currently reports a $0 dividend per share due to suspension decisions made in 2020. With a 32-year history of dividend issuance, the temporary suspension marks a challenging deviation, indicative of strategic shifts during turbulent times.
| Metric | Value |
|---|---|
| Sector | Travel and Leisure |
| Dividend Yield | 4.71% |
| Current Dividend Per Share | $0 USD |
| Dividend History | 32 years |
| Last Cut/Suspension | 2020 |
🗣️ Dividend History
The history of dividend payments is crucial for assessing a company's commitment to returning value to shareholders. Carnival, despite recent suspensions, maintained a robust dividend history for 32 years, showing resilience until the economic impacts of 2020 necessitated a strategic pause.
| Year | Dividend per Share (USD) |
|---|---|
| 2020 | 0.50 |
| 2019 | 2.00 |
| 2018 | 1.95 |
| 2017 | 1.60 |
| 2016 | 1.35 |
📈 Dividend Growth
Dividend growth metrics are instrumental in understanding a company's future dividend prospects. Carnival's 3-year growth is non-existent, with a 5-year decline of -0.24%, underscoring strategic pressures and external challenges impacting payout enhancements.
| Time | Growth |
|---|---|
| 3 years | 0% |
| 5 years | -0.24% |
The average dividend growth is -0.24% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios provide insights into how sustainable dividends are relative to earnings and cash flows. Carnival's EPS-based and free cash flow-based payout ratios are currently at 0%, reflecting the ongoing suspension and lack of immediate dividend plans.
| Key Figure | Ratio |
|---|---|
| EPS-based | 0% |
| Free Cash Flow-based | 0% |
A 0% payout ratio typically implies retained earnings are not distributed to shareholders, often pointing to reinvestment strategies or financial conservation efforts.
✅ Cashflow & Capital Efficiency
The cash flow yield and capital efficiency metrics are critical for evaluating liquidity and operational efficiency...
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.00% | 5.25% | -56.41% |
| Earnings Yield | 5.91% | -0.39% | -51.99% |
| CAPEX to Operating Cash Flow | 78.10% | 76.71% | -295.81% |
| Stock-based Compensation to Revenue | 0.25% | 0.24% | 0.83% |
| Free Cash Flow / Operating Cash Flow Ratio | 21.90% | 23.29% | 395.81% |
The variation in free cash flow indicates fluctuating capital utilization, while high CAPEX ratios suggest intense reinvestment requirements impacting immediate liquidity.
📉 Balance Sheet & Leverage Analysis
A comprehensive balance sheet analysis reveals the company’s long-term financial stability and its leverage handling capacity...
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 312.11% | 463.40% | 507.94% |
| Debt-to-Assets | 59.81% | 64.92% | 69.40% |
| Debt-to-Capital | 75.73% | 82.25% | 83.55% |
| Net Debt to EBITDA | 4.44 | 6.74 | -14.50 |
| Current Ratio | 0.26 | 0.46 | 0.71 |
| Quick Ratio | 0.25 | 0.41 | 0.67 |
| Financial Leverage | 521.87% | 713.74% | 731.92% |
The elevated debt levels paired with declining quick ratios inform on the company’s leverage risk, while liquidity metrics highlight pressing concerns about its ability to meet short-term obligations.
💼 Fundamental Strength & Profitability
Fundamental metrics such as profitability ratios offer key insights into the company's operational success and strategic financial positioning...
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 20.71% | -1.08% | -86.25% |
| Return on Assets | 3.97% | -0.15% | -11.78% |
| Net Margin | 7.66% | -0.34% | -50.07% |
| EBIT Margin | 14.67% | 9.28% | -36.74% |
| EBITDA Margin | 24.89% | 20.26% | -18.05% |
| Gross Margin | 37.50% | 33.70% | 3.39% |
| R&D to Revenue | 0% | 0% | 0% |
The strong projected return on equity for 2024 signals potential recovery, albeit emerging from historically negative profitability margins, necessitating focused operational improvements.
📈 Price Development
🔍 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 2 | |
| Dividend Growth | 1 | |
| Payout Ratio | 1 | |
| Financial Stability | 2 | |
| Dividend Continuity | 1 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 2 |
Total Score: 14/40
🌟 Rating
Given the extensive analysis of Carnival Corporation & plc's financial and dividend-specific metrics, the current rating for dividend potential remains cautious. The company faces significant challenges in reinstituting dividends amidst fiscal pressures and an elevated debt burden. Investors focusing on income should remain cautious, seeking clarity on financial recovery strategies that could potentially resurrect Carnival's historical dividend strength.