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Royal Caribbean stock has soared 37% over the past year, leading the major cruise lines.
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Six Flags stock has fallen 66% over the past year, the laggard among amusement and theme park operators.
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Six Flags is worth less than what either Six Flags or Cedar Fair was worth at the time of their merger in the summer of 2024, but it doesn’t make it cheap or the better play for long-term investors.
One approach to succeeding as an investor in consumer-facing companies is to follow the fun. If folks are having a good time with a company’s product, it bodes well for the sustainability and growth of that business. Royal Caribbean (NYSE: RCL) entertains millions of passengers on multi-day sailings every year. Tens of millions of guests go through the turnstiles of Six Flags‘ (NYSE: FUN) gated attractions over the course of a year.
There is no shortage of laughter, lively conversations, and whimsical shrieks of delight on cruise ships and at amusement parks. However, will the same giddiness carry over to shareholders of Royal Caribbean or Six Flags? Let’s break each business down to see which one has momentum and which one is still a work in progress.
Royal Caribbean is the country’s largest cruise line by market cap, but the silver medalist for revenue and overall fleet capacity. There is a good reason for that. Royal Caribbean shares have more than quadrupled over the past five years, leading the industry in revenue growth and profitability margins.
It was the first of the three major cruise lines to turn profitable. Royal Caribbean got there on a quarterly basis in the seasonally potent third quarter of 2022, achieving full-year profitability a year later. In 2024, it became the first cruise line to resume paying dividends, having suspended them in the wake of the COVID-19 crisis four years earlier.
There is overall bullish momentum for the industry, but Royal Caribbean is the one wrapping up its third straight year of record revenue and operating profits. The cruise ship operator disappointed investors with a 5% increase in revenue for its latest quarter, but the outlook is kind. Analysts see revenue growth accelerating, rising 9% in 2026 on a double-digit increase in net income. With a forward earnings multiple in the high teens, the market leader is attractively priced. It has also hiked its dividend three times since restarting the distributions in late 2024.
It’s been a far bumpier ride for Six Flags shareholders. The stock has shed two-thirds of its value over the past year. The combination of Six Flags and Cedar Fair closed 18 months ago, but the promised synergies have yet to materialize.
