Financial Contrast: Next (OTCMKTS:NXGPY) versus American Eagle Outfitters (NYSE:AEO)

American Eagle Outfitters (NYSE:AEO) and Next (OTCMKTS:NXGPY) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Volatility & Risk

American Eagle Outfitters has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Next has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Earnings and Valuation

This table compares American Eagle Outfitters and Next”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Eagle Outfitters	$5.34 billion	0.76	$329.38 million	$1.16	20.75
Next	$7.82 billion	3.17	$938.45 million	N/A	N/A

Next has higher revenue and earnings than American Eagle Outfitters.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Eagle Outfitters	3.90%	13.82%	5.59%
Next	N/A	N/A	N/A

Insider & Institutional Ownership

97.3% of American Eagle Outfitters shares are owned by institutional investors. 8.7% of American Eagle Outfitters shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.1%. Next pays an annual dividend of $1.03 per share and has a dividend yield of 1.0%. American Eagle Outfitters pays out 43.1% of its earnings in the form of a dividend. American Eagle Outfitters has raised its dividend for 2 consecutive years. American Eagle Outfitters is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American Eagle Outfitters and Next, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Eagle Outfitters	2	11	1	1	2.07
Next	0	1	0	0	2.00

American Eagle Outfitters presently has a consensus price target of $22.18, suggesting a potential downside of 7.86%. Given American Eagle Outfitters’ stronger consensus rating and higher possible upside, equities analysts plainly believe American Eagle Outfitters is more favorable than Next.

Summary

American Eagle Outfitters beats Next on 12 of the 16 factors compared between the two stocks.

About American Eagle Outfitters

American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

About Next

NEXT plc engages in the retail of clothing, beauty, footwear, and home products in the United Kingdom, rest of Europe, the Middle East, Asia, and internationally. The company operates through NEXT Retail; NEXT Online; NEXT Finance; Total Platform; Property Management; and Franchise, Sourcing, and other segments. It offers consumer credit; NEXT branded products; and women’s, men’s, children’s, clothing, homeware, and beauty products under the LABEL brand, as well as other third-party brands. The company also provides property management services, including holding and lease of properties; operates call centers; and websites, marketing, warehousing, and distribution networks to third-party brands. It operates through retail stores, online retail platforms, and franchise stores. The company was formerly known as J Hepworth & Son and changed its name to NEXT plc in 1986. NEXT plc was founded in 1864 and is headquartered in Enderby, the United Kingdom.