James Brumley, The Motley Fool

Thu, Jun 19, 2025, 2:04 AM7 min read

• The COVID-19 pandemic inflicted some damage on companies that's still readily evident.

• This lingering damage, however, isn't inherently insurmountable.

• One particular name in one particular industry is set to thrive with or without economic headwinds.

• 10 stocks we like better than Carnival Corp. ›

The doubt surrounding this stock makes enough superficial sense. The company took on a massive amount of debt to survive the COVID-19 pandemic, after all. While the contagion is now mostly in the rearview mirror, all this debt is still on the balance sheet.

There are a couple of important details the market's just not taking heed of, however, that make this name a compelling buy.

The company? Leisure cruise outfit Carnival Corp. (NYSE: CCL). Here's the deal.

There's the Carnival you know ... the one consisting of a fleet of 29 boats offering affordable vacation experiences promoted with some rather engaging advertising. Then there's the Carnival you probably don't know. That's brands like Princess, Holland America, Costa, AIDA, and Cunard, which operates the Queen Elizabeth and Queen Mary 2. All told, the corporation owns 93 different ships offering a wide array of travel experiences at a range of price points.

They're all in the same proverbial boat, of course, by virtue of all being part of the same organization that amassed about $24 billion worth of new long-term debt during and because of the coronavirus contagion that's costing it roughly $2 billion in interest payments per year. For perspective, the company's generating about $25 billion in annual revenue right now, roughly $2 billion of which is converted into net income. Carnival's current market cap also stands at just over $30 billion.

This snapshot of the company's condition and capitalization isn't exactly compelling. Indeed, that's a big reason shares still trade well below their pre-pandemic peak -- investors are just fearful that the cruise company may never shrug off the pandemic's impact, particularly if economic weakness stifles consumerism.

There's some other relevant information worth considering here, however.

Getting straight to the point, despite all of its presumed problems and pitfalls, Carnival is doing fine. It's doing great, in fact.

Take its first-quarter results as an example. Record-breaking revenue of $5.8 billion was up 7.5% year over year, doubling operating income thanks to improved operating margins.