Tilly’s (NYSE: TLYS) and American Eagle Outfitters (NYSE:AEO) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitabiliy, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current recommendations for Tilly’s and American Eagle Outfitters, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tilly’s 0 3 3 0 2.50
American Eagle Outfitters 3 9 9 0 2.29

Tilly’s currently has a consensus target price of $10.83, indicating a potential upside of 7.79%. American Eagle Outfitters has a consensus target price of $15.74, indicating a potential upside of 33.49%. Given American Eagle Outfitters’ higher probable upside, analysts plainly believe American Eagle Outfitters is more favorable than Tilly’s.

Profitability

This table compares Tilly’s and American Eagle Outfitters’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tilly’s 2.46% 7.86% 4.91%
American Eagle Outfitters 5.44% 18.95% 12.56%

Insider & Institutional Ownership

41.0% of Tilly’s shares are held by institutional investors. Comparatively, 89.9% of American Eagle Outfitters shares are held by institutional investors. 53.4% of Tilly’s shares are held by company insiders. Comparatively, 5.8% of American Eagle Outfitters shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Tilly’s and American Eagle Outfitters’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tilly’s $569.68 million 0.51 $47.93 million $0.48 20.94
American Eagle Outfitters $3.62 billion 0.58 $496.35 million $1.08 10.92

American Eagle Outfitters has higher revenue and earnings than Tilly’s. American Eagle Outfitters is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Dividends

American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 4.2%. Tilly’s does not pay a dividend. American Eagle Outfitters pays out 46.3% of its earnings in the form of a dividend.

Volatility & Risk

Tilly’s has a beta of -0.43, meaning that its share price is 143% less volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Summary

American Eagle Outfitters beats Tilly’s on 12 of the 16 factors compared between the two stocks.

About Tilly’s

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

About American Eagle Outfitters

American Eagle Outfitters, Inc. (AEO Inc.) is a multi-brand specialty retailer. The Company offers a range of apparel and accessories for men and women under the American Eagle Outfitters Brand (AEO Brand), and intimates, apparel and personal care products for women under the Aerie brand. AEO Inc. operates stores in the United States, Canada, Mexico, Hong Kong, China and the United Kingdom. As of January 28, 2017, the Company operated over 1,000 retail stores and online at ae.com and aerie.com in the United States and internationally. Its company-owned retail stores are located in shopping malls, lifestyle centers and street locations in the United States, Canada, Mexico, China, Hong Kong and the United Kingdom. Its other brands include Tailgate and Todd Snyder New York. Tailgate is an apparel brand with a college town store concept. Todd Snyder New York is a menswear brand. As of January 28, 2017, the AEO brand operated 943 stores and online at www.ae.com.

Receive News & Ratings for Tilly's Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tilly's Inc. and related companies with MarketBeat.com's FREE daily email newsletter.