#7 - Royal Caribbean Cruises (NYSE:RCL)
The last mid-cap stock on this list may not be a mid-cap for much longer. However, as of July 2022, Royal Caribbean Cruises (NYSE:RCL) is just below the $10 billion market cap threshold, so it makes a list.
But what is the opportunity? The cruise line now has its entire fleet back on the water. And more importantly, occupancy rates are back to pre-pandemic levels. The forecast is for strong revenue and earnings growth in the next five years. And that should support the company’s forward price/earnings ratio of 7.73 (as of July 2022).
Of course, there’s a risk that the economy may continue to slow. And if that’s the case, the cruise line industry may be affected more than other entertainment sectors. The cruise line also suspended its dividend at the onset of the pandemic in 2020. Based on the company’s past dividend history, there’s reason to believe that the dividend may be reinstated sometime after the company returns to profitability.
About Royal Caribbean Cruises
Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd.
Read More - Current Price
- $241.49
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $220.00 (8.9% Downside)
Mid-cap stocks are an ideal way to diversify your portfolio. However, as with any asset class, moderation is the key. For many portfolios, a few quality mid-caps will be sufficient to provide the right balance for your portfolio.
The benefits of mid-cap stocks are that they offer the best of both worlds between large-cap and small-cap stocks. Specifically, they are generally less expensive than large-cap stocks and are generally less volatile than many small-cap stocks.
However, like any investment, some mid-cap stocks are still in the growth phase. Therefore, mid-cap stocks are generally the choice of risk-tolerant investors who have the ability to hold on to the stocks for a significant period of time.
Today, there are mutual funds for just about every investment objective and risk tolerance. For example, the Fidelity Index Mid Cap Fund (NYSEARCA:FSMD) closely tracks the Russell Midcap index and is heavily weighted to the technology, industrials, consumer cyclical and financial services sectors.
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