MGM Resorts International vs. Royal Caribbean Cruises: Which Consumer Stock Is a Better Buy in 2026?

Investors deciding between MGM Resorts International (NYSE:MGM) and Royal Caribbean Cruises (NYSE:RCL) are choosing between two distinct ways to play the ongoing global trend in consumer travel and entertainment spending.

MGM focuses on land-based luxury resorts and a growing digital betting presence, whereas Royal Caribbean dominates the high seas with its extensive fleet. This comparison looks at which business model offers more value for your investment dollar today.

The case for MGM Resorts International

MGM Resorts International operates a global portfolio of 31 hotel and gaming destinations. The company reaches customers through strategic ventures like BetMGM, which focuses on online sports betting and iGaming. It also maintains an exclusive partnership with Major League Baseball and manages luxury destinations in Macau, though long-time executive Pansy Ho recently liquidated her personal equity stake.

In FY 2025, revenue reached nearly $17.5 billion, representing a growth rate of approximately 1.7% over the previous year. The company reported net income of roughly $206.2 million for the same period. This resulted in a net margin of about 1.2%, which reflects the percentage of revenue the company kept as profit after all its operating and financial costs were met.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 11.9x, which measures the company's total debt relative to the value of its shareholder equity. The current ratio, indicating the ability to pay short-term debts with short-term assets, is approximately 1.2x. Free cash flow, or cash from operations minus capital spending, was nearly $1.7 billion for the fiscal year.

The case for Royal Caribbean Cruises

Royal Caribbean Cruises operates a global vacation company with a fleet of 69 ships sailing to more than 1,000 destinations. The company relies on a network of travel advisors and joint ventures like TUI Cruises to reach passengers in the travel and tourism stocks category. It also partners with infrastructure investors to develop and own strategic cruise terminals in major Mediterranean ports.

During FY 2025, revenue rose to approximately $17.9 billion, which is a growth of nearly 8.8% compared to the prior year. The company generated net income of about $4.3 billion during this timeframe. This performance led to a net margin of roughly 23.8%, suggesting that the company is retaining a significant portion of its sales as profit.

Based on the December 2025 balance sheet, the debt-to-equity ratio is roughly 2.3x. This ratio shows the relationship between borrowed funds and the money provided by shareholders. The current ratio is approximately 0.2x, while free cash flow for the year was $1.2 billion, providing capital for fleet modernization and capacity growth.

Risk profile comparison

MGM Resorts International faces risks from significant debt levels and lease obligations that limit its capital allocation flexibility. The business also deals with intense competition from new land-based resorts and expanding iGaming platforms. Furthermore, the potential acquisition by People Incorporated introduces uncertainty regarding future governance, while persistent cybersecurity threats remain a material concern for its digital and physical operations.

Royal Caribbean Cruises depends on a limited number of global shipyards, making fleet expansion vulnerable to labor shortages or supply chain failures. The company must also navigate evolving environmental regulations regarding carbon emissions, which may increase compliance costs. Like its competitor Carnival, the business is highly sensitive to geopolitical tensions and fluctuations in the global economy that can impact vacation demand.

Valuation comparison

Royal Caribbean Cruises currently appears cheaper based on its Forward P/E, which compares the stock price to future earnings estimates, while MGM Resorts International offers a lower P/S ratio relative to its total sales.

Sector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with Royal Caribbean. MGM Resorts has a diversified business spanning Las Vegas, regional casinos, and the BetMGM digital betting venture, and that diversification has its merits. But Las Vegas has been struggling lately, with occupancy and spending softening, and BetMGM just trimmed its own revenue outlook for the year. The growth story is mixed right now, even with bright spots in regional operations and Macao.

Royal Caribbean is firing on a different level entirely. The company just delivered a quarter that beat its own guidance, and management already has roughly two-thirds of this year's capacity booked at record prices. I like that kind of visibility into future demand; it’s rare and valuable. Earnings are projected to grow at a double-digit pace again in 2026, and the company keeps returning cash to shareholders through buybacks and dividends.

Royal Caribbean isn't cheap, and cruise demand can soften quickly if the economy turns. But right now, it's the clearer growth story with the stronger hand of cards.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.