American Eagle Outfitters (NYSE:AEO) versus Levi Strauss & Co. (NYSE:LEVI) Head to Head Contrast

Levi Strauss & Co. (NYSE:LEVI) and American Eagle Outfitters (NYSE:AEO) are both mid-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Risk and Volatility

Levi Strauss & Co. has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Valuation & Earnings

This table compares Levi Strauss & Co. and American Eagle Outfitters”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Levi Strauss & Co.	$6.28 billion	1.22	$578.10 million	$1.46	13.42
American Eagle Outfitters	$5.50 billion	0.57	$329.38 million	$1.12	16.49

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

Dividends

Levi Strauss & Co. pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.7%. Levi Strauss & Co. pays out 38.4% of its earnings in the form of a dividend. American Eagle Outfitters pays out 44.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Levi Strauss & Co. has increased its dividend for 4 consecutive years and American Eagle Outfitters has increased its dividend for 2 consecutive years. Levi Strauss & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

69.1% of Levi Strauss & Co. shares are held by institutional investors. Comparatively, 97.3% of American Eagle Outfitters shares are held by institutional investors. 1.3% of Levi Strauss & Co. shares are held by insiders. Comparatively, 8.7% of American Eagle Outfitters shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations for Levi Strauss & Co. and American Eagle Outfitters, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	3	12	0	2.80
American Eagle Outfitters	2	11	1	1	2.07

Levi Strauss & Co. presently has a consensus price target of $26.69, suggesting a potential upside of 36.25%. American Eagle Outfitters has a consensus price target of $21.75, suggesting a potential upside of 17.76%. Given Levi Strauss & Co.’s stronger consensus rating and higher possible upside, equities analysts clearly believe Levi Strauss & Co. is more favorable than American Eagle Outfitters.

Profitability

This table compares Levi Strauss & Co. and American Eagle Outfitters’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	9.20%	25.08%	8.19%
American Eagle Outfitters	3.49%	16.76%	6.61%

Summary

Levi Strauss & Co. beats American Eagle Outfitters on 13 of the 18 factors compared between the two stocks.

About Levi Strauss & Co.

Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.

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.