The 3 Best Travel Stocks to Buy in May 2024

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

These days, the narrative underlying the best travel stocks to buy is a tricky one. After all, with the Covid-19 pandemic being more of a distant memory, the concept of revenge travel has faded. Nevertheless, it’s not a completely irrelevant phenomenon.

While the acute urgency might not be there, consumers are increasingly prioritizing new experiences. That’s especially the case for young and upwardly mobile workers. Plus, with the economy adding more jobs than expected (the April employment picture aside), it’s possible that the travel industry’s total addressable market has expanded.

If so, investors can potentially bank on this development. Below are the best travel stocks to buy.

Delta Air Lines (DAL)

Inside the airplane cabin of a Delta flight.

Source: EQRoy / Shutterstock.com

One of the reasons why Delta Air Lines (NYSE:DAL) ranks among the best travel stocks to buy is relative performance. Since the beginning of the year, DAL has popped up a bit more than 29%. Generally, it has been a gradual rise skyward. On the other hand, the discount airline specialists have been disappointing and turbulent.

To be sure, Delta isn’t perfect. It could use some work on its balance sheet, specifically its modest cash-to-debt ratio of 0.17X. However, I do appreciate that the company posts a three-year revenue growth rate of 49.8%. That’s well above the industry average. Even with that performance, DAL is cheap, trading at only 0.57X trailing-year revenue. With consumers prioritizing experiences, Delta now seems a reasonable wager.

For fiscal 2024, experts are looking for earnings per share of $6.62 on revenue of $58.11 billion. Last year, the company posted earnings of $6.25 per share on sales of $61.91 billion. While it might not bring the excitement factor, it makes for one of the best travel stocks to buy.

Royal Caribbean Cruises (RCL)

Deck of a Royal Caribbean (RCL) cruise ship looking over the ocean

Source: Venturelli Luca / Shutterstock.com

As with Delta Air Lines above, relative performance is a key factor for Royal Caribbean Cruises (NYSE:RCL). Since the beginning of this year, RCL stock gained almost 18% of equity value. It’s been a choppy ride but it’s getting the job done. The same cannot be said for its two competitors, both of which are down double-digit percentages during the aforementioned period.

Royal isn’t a sterling example within the travel industry. Looking at its balance sheet, its cash-to-debt ratio sits at a lowly 0.02X. That’s not good compared to related enterprises. However, it does sport a three-year revenue growth rate of 68.3%. While this robust metric won’t last, it does demonstrate the viability of Royal’s recovery narrative. Also, shares trade at a discounted 12.97X to forward earnings.

Interestingly, for fiscal 2024, analysts project that EPS will land at $10.89 on revenue of $16.38 billion. Last year, the cruise ship operator posted EPS of $6.77 on sales of $13.9 billion. Combined with the aforementioned cheap multiple, RCL makes a case for best travel stocks to buy.

Uber (UBER)

Uber sign on its headquarters building in San Francisco, California, USA - June 6, 2023. Uber Technologies is a transportation conglomerate.

Source: JHVEPhoto / Shutterstock.com

Technically speaking, ride-sharing giant Uber (NYSE:UBER) doesn’t fall under the category of best travel stocks to buy. That’s because it’s not really a travel enterprise. Instead, it belongs in the software application ecosystem. It’s true magic stems from connecting people with extra time and space to provide a mobility service with those who need such solutions.

Moving forward, Uber will likely be indispensable when it comes to mobility abroad under the vacationing context. Too many times, when going abroad to “questionable” areas, tourists can get easily scammed by taxi drivers. Frankly, tourists usually don’t know the language and they don’t know the lay of the land.

With Uber, you don’t need to know. Everything is handled through the app, including service complaints and what not. Essentially, the platform keeps honest people honest.

Best of all, the business resonates with Wall Street. For fiscal 2024, analysts anticipate EPS of $1.36 on sales of $43.27 billion. Last year, the company posted earnings of 81 cents per share on sales of $34.83 billion.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

More From InvestorPlace

The post The 3 Best Travel Stocks to Buy in May 2024 appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.