Apr 24 2008
Carnival Cruising To Dividend Growth Territory
I used to think that since it was a capital intensive business, Carnival (CCL) wouldn’t qualify as a classical dividend growth story, but I stand corrected.
Carnival is the most dominating global cruise company in the world generating revenues in excess of $13 billion; trouncing the $6 billion eked out by distant second place, Royal Caribbean. The company didn’t become this big for no good reason: it has the most recognizable brand and the fattest profit margin (17.5%) in the cruise line business. For comparison, Royal Caribbean’s profit margin is only a meager 9.8%.
Carnival is also spinning out lots of cash, and it’s not afraid to share the wealth with investors. In 2007, the Miami-based company garnered an astonishing $4.07 billion of cash from business operations. Out of which, only $0.54 billion was needed for ship improvements/refurbishments, and developments to various tour assets and port facilities.
With $3.53 [...]
Original post by Financial Jungle Guy