Is Royal Caribbean Stock a Buy?

There's good news and bad news for Royal Caribbean (NYSE: RCL) shareholders. The good news is that shares of the country's second-largest cruise line operator have more than tripled since bottoming out in the middle of March. That's nice. The bad news is that the once lofty dividend is gone, and the stock has surrendered more than half of its value since the start of 2020. That's not so nice.

It's a scary time to own any cruise line. Royal Caribbean and rivals Norwegian Cruise Line Holdings (NYSE: NCLH) and Carnival (NYSE: CCL)(NYSE: CUK) haven't had a U.S. cruise set sail in more than seven months. They're hoping to start sailing again in December, but it's not up to them to decide that at the moment. There are deep uncertainties, but the payoff is pretty clear. If the industry gets back to where it was at beginning of this year -- in terms of consumer and investor mindsets -- all three of these stocks would more than double. Even if it takes a few years (and it will) to rebound, Royal Caribbean, Norwegian Cruise Line, and Carnival would probably beat the market in the next four to six years in that scenario.

Is Royal Caribbean worth the investing risk? Let's take a closer look at the potentially promising stock that just happens to have its back against the rock wall these days. Let's see if Royal Caribbean stock is a buy.

Source Fool.com