Comparing American Eagle Outfitters (NYSE:AEO) and ATRenew (NYSE:RERE)

ATRenew (NYSE:RERE) and American Eagle Outfitters (NYSE:AEO) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ATRenew	2.01%	12.32%	8.30%
American Eagle Outfitters	5.91%	23.63%	9.59%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATRenew	$3.01 billion	0.29	$48.09 million	$0.29	13.60
American Eagle Outfitters	$5.50 billion	0.53	$191.98 million	$1.96	8.87

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

Institutional and Insider Ownership

19.3% of ATRenew shares are owned by institutional investors. Comparatively, 97.3% of American Eagle Outfitters shares are owned by institutional investors. 10.7% of ATRenew shares are owned by company insiders. Comparatively, 8.9% of American Eagle Outfitters shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for ATRenew and American Eagle Outfitters, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATRenew	0	1	2	0	2.67
American Eagle Outfitters	1	12	2	0	2.07

ATRenew presently has a consensus target price of $5.50, suggesting a potential upside of 39.42%. American Eagle Outfitters has a consensus target price of $19.55, suggesting a potential upside of 12.43%. Given ATRenew’s stronger consensus rating and higher possible upside, equities research analysts plainly believe ATRenew is more favorable than American Eagle Outfitters.

Risk and Volatility

ATRenew has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Dividends

ATRenew pays an annual dividend of $0.10 per share and has a dividend yield of 2.5%. American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.9%. ATRenew pays out 34.5% of its earnings in the form of a dividend. American Eagle Outfitters pays out 25.5% 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. American Eagle Outfitters has increased 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.

Summary

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

About ATRenew

ATRenew Inc., through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People's Republic of China. It primarily sells mobile phones, laptops, tablets, drones, digital cameras; and vintage bags, watches, liquor, gold, and various household goods through its online platforms and offline stores, as well as provides services to third-party merchants to sell the products through its platforms. The company was formerly known as AiHuiShou International Co. Ltd. and changed its name to ATRenew Inc. November 2021. The company was incorporated in 2011 and is headquartered in Shanghai, the People's Republic of China.

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.