Royal Caribbean is the IBD Stock Of The Day for Thursday as shares work to retake a buy point. Meanwhile, the cruise operator on Wednesday announced a dividend hike and new $1 billion stock buyback plan.
Royal Caribbean said it would increase its quarterly dividend 36%, to 75 cents per share, to be doled out on April 4. The board of directors also approved a $1 billion share repurchase program for the next 12 months.
"Our strong performance and balance sheet position allows us to further expand capital allocation while we invest in the future," CEO Jason Liberty said in the announcement. He noted that Royal has paid out or declared nearly $500 million in dividends over the past four months.
"Coupled with the newly authorized share repurchase program, these actions reflect our confidence in our business, or focus on disciplined capital allocation, and our commitment to delivering long-term value for shareholders," Liberty continued.
Earnings Beat, River Cruise Launch
Meanwhile, Royal Caribbean is coming off a strong Q4 report from late January. Earnings increased 30% to $1.63 per share adjusted to clear estimates for $1.50 per share. Revenue jumped 13% to $3.76 billion, which matched estimates.
Royal noted that bookings accelerated during the quarter, resulting in the best five-week period in company history. Guest spending for onboard and pre-cruise purchases has also exceeded previous years, driven by greater participation levels at higher prices.
The company expects to achieve 23% adjusted earnings growth for 2025, to range from $14.35 to $14.65 per share. The midpoint of the outlook was ahead of FactSet expectations for $14.45 per share for the year.
These Are The Five Best Stocks To Buy And Watch Right Now
Royal Caribbean also announced the launch of Celebrity River Cruises. Celebrity Cruises, a subsidiary of Royal Caribbean, signed an order for 10 new ships that will begin sailing in 2027, with bookings to begin this year.
The new river cruises are an extension of Celebrity's premium offering, which provides "signature hospitality and unique itinerary offerings" through various historically significant cities. Celebrity River Cruises plans to start sailing in Europe.
Liberty noted in the announcement that about half of Royal Caribbean's guests have experienced or intend to vacation on a river cruise.
Royal Caribbean Stock
Royal Caribbean eased for a second day on Thursday. That put RCL stock back below a buy point at 258.70 for a cup base.
Shares gapped out of the base on its Jan. 28 earnings report, and hit a record high 277.08 on Jan. 31.
The stock has pulled back, and is finding support at its 21-day exponential moving average.
Royal Caribbean is up about 11% in 2025.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
