Head to Head Review: American Eagle Outfitters (AEO) & Its Rivals

American Eagle Outfitters (NYSE:AEO) is one of 285 publicly-traded companies in the “Specialty Retail” industry, but how does it compare to its competitors? We will compare American Eagle Outfitters to related businesses based on the strength of its valuation, profitability, earnings, institutional ownership, analyst recommendations, dividends and risk.

Insider and Institutional Ownership

97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 51.9% of shares of all “Specialty Retail” companies are held by institutional investors. 8.9% of American Eagle Outfitters shares are held by company insiders. Comparatively, 20.5% of shares of all “Specialty Retail” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company 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 2.3%. American Eagle Outfitters pays out 25.5% of its earnings in the form of a dividend. As a group, “Specialty Retail” companies pay a dividend yield of 2.0% and pay out 35.5% of their earnings in the form of a dividend. American Eagle Outfitters has raised its dividend for 2 consecutive years. American Eagle Outfitters is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Eagle Outfitters	5.91%	23.63%	9.59%
American Eagle Outfitters Competitors	-3.59%	-13.85%	3.22%

Earnings & Valuation

This table compares American Eagle Outfitters and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
American Eagle Outfitters	$5.50 billion	$191.98 million	11.05
American Eagle Outfitters Competitors	$7.05 billion	$386.51 million	31.40

American Eagle Outfitters’ competitors have higher revenue and earnings than American Eagle Outfitters. American Eagle Outfitters is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

American Eagle Outfitters has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, American Eagle Outfitters’ competitors have a beta of 1.91, suggesting that their average share price is 91% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for American Eagle Outfitters and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Eagle Outfitters	1	12	2	0	2.07
American Eagle Outfitters Competitors	3694	15630	21649	593	2.46

American Eagle Outfitters presently has a consensus price target of $19.55, indicating a potential downside of 9.72%. As a group, “Specialty Retail” companies have a potential upside of 5.73%. Given American Eagle Outfitters’ competitors stronger consensus rating and higher possible upside, analysts clearly believe American Eagle Outfitters has less favorable growth aspects than its competitors.

Summary

American Eagle Outfitters competitors beat American Eagle Outfitters on 9 of the 15 factors compared.

American Eagle Outfitters Company Profile

American Eagle Outfitters, Inc. is a specialty retailer of apparel, accessories and personal-care products. Its American Eagle brand offers casual clothing, including denim, tops and accessories, while Aerie sells intimates, loungewear, swimwear and activewear. The company also operates OFFLINE by Aerie, a brand focused on activewear and apparel. The company sells through its retail stores and online channels, serving customers primarily in the United States and Canada, with additional international reach through stores and other distribution arrangements.