Alphabet Inc. (GOOGL) vs Royal Caribbean Cruises Ltd. (RCL): Which Is the Better Buy in 2026?
As of 2026-06-19, GOOGL is overvalued at $368, with a DCF intrinsic value of $94 and a margin of safety of -290%. RCL is undervalued at $313, with an intrinsic value of $458 and a margin of safety of 32%. Of the two, RCL has the wider margin of safety.
Rewards
- ★Alphabet Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 60.4% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Alphabet Inc. scores 89/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $9.02 of earning power — management is an exceptional capital allocator.
Risks
- ⚠FCF yield of 1.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠High leverage (2.12x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠11 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $368?
Market pricing in significantly higher growth than history — aggressive.
Requires positive FCF to compute implied growth rate.
Economic Moat Score
Learn more →Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
No durable moat detected, though roic consistency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: GOOGL vs RCL
Is Alphabet Inc. or Royal Caribbean Cruises Ltd. more undervalued in 2026?▼
Based on our discounted cash flow model, RCL trades at a 31.7% margin of safety (intrinsic value $458 vs. price $313), compared to GOOGL's -289.6% margin of safety (intrinsic $94 vs. $368).
Which stock has a wider economic moat, Alphabet Inc. or Royal Caribbean Cruises Ltd.?▼
GOOGL scores 89/100 (Wide moat), while RCL scores 35/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Royal Caribbean Cruises Ltd. in financial distress?▼
RCL's Altman Z-Score of 2.2 places it in the Grey zone, signaling elevated bankruptcy risk. GOOGL scores 2.4 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Alphabet Inc. or Royal Caribbean Cruises Ltd.?▼
Alphabet Inc. (GOOGL) generates a 1.6% free cash flow yield, compared to Royal Caribbean Cruises Ltd.'s -0.2%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Alphabet Inc. or Royal Caribbean Cruises Ltd.?▼
GOOGL earns 21.0% ROIC versus RCL's 11.9%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Alphabet Inc.'s or Royal Caribbean Cruises Ltd.'s?▼
GOOGL's dividend earns a safety score of 88/100 (Very Safe), compared to RCL's 73/100 (Safe). GOOGL has raised its dividend for 1 consecutive years.