Six Flags vs. Royal Caribbean: Which Leisure Stock Looks More Compelling for the Next Decade?​

One approach to succeeding as an investor in consumer-facing companies is to follow the fun. If folks are having a good time with a company's product, it bodes well for the sustainability and growth of that business. Royal Caribbean (NYSE: RCL) entertains millions of passengers on multi-day sailings every year. Tens of millions of guests go through the turnstiles of Six Flags' (NYSE: FUN) gated attractions over the course of a year.

There is no shortage of laughter, lively conversations, and whimsical shrieks of delight on cruise ships and at amusement parks. However, will the same giddiness carry over to shareholders of Royal Caribbean or Six Flags? Let's break each business down to see which one has momentum and which one is still a work in progress.

Image source: Getty Images.

Hitting the high seas

Royal Caribbean is the country's largest cruise line by market cap, but the silver medalist for revenue and overall fleet capacity. There is a good reason for that. Royal Caribbean shares have more than quadrupled over the past five years, leading the industry in revenue growth and profitability margins.

It was the first of the three major cruise lines to turn profitable. Royal Caribbean got there on a quarterly basis in the seasonally potent third quarter of 2022, achieving full-year profitability a year later. In 2024, it became the first cruise line to resume paying dividends, having suspended them in the wake of the COVID-19 crisis four years earlier.

There is overall bullish momentum for the industry, but Royal Caribbean is the one wrapping up its third straight year of record revenue and operating profits. The cruise ship operator disappointed investors with a 5% increase in revenue for its latest quarter, but the outlook is kind. Analysts see revenue growth accelerating, rising 9% in 2026 on a double-digit increase in net income. With a forward earnings multiple in the high teens, the market leader is attractively priced. It has also hiked its dividend three times since restarting the distributions in late 2024.

Taking a wild ride

It's been a far bumpier ride for Six Flags shareholders. The stock has shed two-thirds of its value over the past year. The combination of Six Flags and Cedar Fair closed 18 months ago, but the promised synergies have yet to materialize.

The shares rallied in October when an activist investing group led by Jana Partners and Travis Kelce -- yes, that Travis Kelce -- announced efforts to shake up the chain. The sizzle was short-lived. Six Flags stock has plummeted more than 40% since October's high after those headlines started to fizzle.

Analysts see Six Flags returning to profitability in 2026, but its debt-heavy balance sheet is a high bar for its financial results to clear. The stock isn't cheap on a forward earnings basis, but it is a historical bargain. The company is now worth less than either Six Flags or Cedar Fair were just before the merger. There is a lot of work to be done, and some of it may prove unpopular with theme park enthusiasts. Over the weekend, the socials heated up with reports of Six Flags getting ready to unload more of its smaller, poor-performing gated attractions.

The upside is higher for Six Flags than Royal Caribbean over the next decade, if it can successfully execute a turnaround and eventually start growing again. The odds may not be in its favor, making Royal Caribbean the smarter play over the next 10 years.

Rick Munarriz has positions in Royal Caribbean Cruises. The Motley Fool has positions in and recommends Six Flags Entertainment. The Motley Fool has a disclosure policy.