SAGA & Carnival (CCL): 2 FTSE cruise stocks to boost your portfolio

The cruise industry is an important segment of the travel and tourism sector and provides sea-based holiday experiences. Companies in this industry own and operate cruise ship services across multiple destinations globally. The industry has been severely impacted by the COVID-19 pandemic, social distancing measures and other travel restrictions. In addition, the spread of new variants of the coronavirus continued to pose new risks to the industry.

Rising vaccination rates and easing of travel restrictions are expected to drive recovery in the cruise industry to pre-pandemic levels. However, investors must carefully evaluate and analyse these cruise stocks before investing as they are highly cyclical in nature and hugely impacted by the macroeconomic situations.

(Data source: Refinitiv)

Let us review in detail the investment prospect in two FTSE listed cruise stocks – SAGA & Carnival.

Saga Plc (LON: SAGA)

Saga is a UK-based specialist engaged in offering products and services for people aged 50 years and above. It also operates boutique cruise lines. For the H1 2021 ended 31 July 2021, the company recorded a pre-tax loss of £2.8 million compared to a pre-tax profit of £15.9 million in H1 2020.

As of 6 October 2021, the shares of Saga are trading at GBX 330.40, down by 4.67% at 10:36 AM BST. Its market cap stands at £485.59 million.

Saga announced the successful restart of cruise operations from June 2021. The company estimated tour operations bookings for 2021/22 to be £18 million and £109 million for 2022/23, ahead of pre-pandemic levels. However, the larger travel industry continues to be grappled by the uncertainty associated with the long-term impact of the COVID-19 pandemic.

In the last one year, the shares of Saga returned 110.4% to shareholders.

Carnival Plc (LON: CCL)

FTSE 250 listed Carnival is a cruise operator and one of the leading travel leisure companies in the world. For Q1 2021 ended 31 August 2021, Carnival’s revenues were $546 million compared to $31 million in the same period in 2020.

As of 6 October 2021, the shares of Carnival are trading at GBX 1,663.00, down by 3.45% at 10:55 AM BST. Its market cap stands at £3,181.52 million.

Last month, Carnival announced plans to resume passenger operations on 42 ships constituting over 50% of its fleet, by the end of October. It also plans to return to 65% of capacity in the new year.

In the last one year, the shares of Carnival returned 67.7% to shareholders.