These days, the underlying story of the best travel stocks to buy is a tricky one. After all, the concept of revenge travel has faded as the COVID-19 pandemic becomes a distant memory. However, this is not a completely unrelated phenomenon.
It may be less urgent, but consumers are increasingly prioritizing new experiences. This is especially true for young, upwardly mobile workers. Additionally, the economy added more jobs than expected (April employment figures aside), which likely expanded the travel industry's overall addressable market.
If so, investors could be excited about this development. Here are the best travel stocks to buy.
Delta Airlines (DAL)
Source: EQRoy / Shutterstock.com
One of the reasons is delta airlines (New York Stock Exchange:Dal) Ranking of the best travel stocks to buy is relative performance. Since the beginning of this year, DAL has skyrocketed by just over 29% for him. Overall, it has been gradually rising toward the sky. Meanwhile, the low-cost airline industry remains disappointed and in turmoil.
Granted, Delta isn't perfect. It will need to improve its balance sheet, specifically its modest cash-to-debt ratio of 0.17x. However, we appreciate that the company has recorded a revenue growth rate of 49.8% over his three years. This is far above the industry average. Despite this performance, DAL is cheap, trading at just 0.57 times trailing-year earnings. Delta now seems like a reasonable bet as consumers prioritize experience.
For fiscal year 2024, experts expect earnings of $6.62 per share and revenue of $58.11 billion. Last year, the company had sales of $61.91 billion and earnings per share of $6.25. It may not bring any excitement, but it's one of the best travel stocks to buy.
Royal Caribbean Cruises (RCL)
Source: Venturelli Luca / Shutterstock.com
As with Delta Airlines above, relative performance is the key factor. royal caribbean cruises (New York Stock Exchange:R.C.L.). Since the beginning of this year, RCL stock has increased approximately 18% in value. It's been a shaky ride, but work is progressing smoothly. The same cannot be said for its two competitors, both of which have declined by double-digit percentages during the aforementioned period.
Royal is not an outstanding example in the travel industry. Looking at the balance sheet, the cash-to-debt ratio is low at 0.02x. Not good compared to related companies. However, the three-year earnings growth rate is 68.3%. This solid metric won't last long, but it does point to the viability of Royal's recovery story. The stock also trades at a discount to forward earnings of 12.97x.
Interestingly, analysts are forecasting EPS of $10.89 on revenue of $16.38 billion for fiscal year 2024. Last year, the cruise ship operator posted EPS of $6.77 on revenue of $13.9 billion. Combined with the cheap multiple mentioned above, RCL makes the case for a great travel stock to buy.
Uber
Source: JHVEPhoto / Shutterstock.com
A ride-sharing giant, to be exact. Uber (New York Stock Exchange:Uber) does not fit into the category of best travel stocks to buy. Because it's not really a travel agency. Instead, it belongs to the software application ecosystem. The real magic comes from connecting people with extra time and space and providing mobility services to those who need such solutions.
From now on, Uber will become essential when it comes to traveling abroad during holidays. Tourists are often easily fooled by taxi drivers when going to “seedy” parts of the country. To be frank, tourists usually don't understand the language or know what the area is like.
With Uber, you don't need to know that. Everything is handled through the app, including complaints about the service. Basically, the platform keeps honest people honest.
Most of all, this business resonates with Wall Street. Analysts expect him to report EPS of $1.36 and revenue of $43.27 billion in fiscal 2024. Last year, the company had revenue of $34.83 billion and earnings per share of 81 cents.
Publication date, Josh Enomoto did not have any positions (directly or indirectly) in any securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
