Comparing Vera Bradley (NASDAQ:VRA) and Abercrombie & Fitch (NYSE:ANF)

Vera Bradley (NASDAQ:VRA) and Abercrombie & Fitch (NYSE:ANF) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility and Risk

Vera Bradley has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Earnings and Valuation

This table compares Vera Bradley and Abercrombie & Fitch”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vera Bradley	$269.65 million	0.41	-$47.84 million	($1.72)	-2.32
Abercrombie & Fitch	$5.27 billion	0.76	$506.92 million	$10.54	8.47

Abercrombie & Fitch has higher revenue and earnings than Vera Bradley. Vera Bradley is trading at a lower price-to-earnings ratio than Abercrombie & Fitch, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Vera Bradley and Abercrombie & Fitch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vera Bradley	-17.74%	-12.00%	-6.48%
Abercrombie & Fitch	9.63%	36.36%	14.26%

Institutional & Insider Ownership

59.9% of Vera Bradley shares are owned by institutional investors. 12.1% of Vera Bradley shares are owned by company insiders. Comparatively, 2.3% of Abercrombie & Fitch shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Vera Bradley and Abercrombie & Fitch, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vera Bradley	1	2	0	0	1.67
Abercrombie & Fitch	0	5	8	0	2.62

Abercrombie & Fitch has a consensus target price of $117.45, indicating a potential upside of 31.56%. Given Abercrombie & Fitch’s stronger consensus rating and higher probable upside, analysts plainly believe Abercrombie & Fitch is more favorable than Vera Bradley.

Summary

Abercrombie & Fitch beats Vera Bradley on 11 of the 14 factors compared between the two stocks.

About Vera Bradley

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women’s handbags, luggage and travel items, fashion and home accessories, and gifts. It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida. The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including ID holders, lanyards, wallets, wristlets, eyewear, scarves, hair accessories, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consist of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags. It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; apparel/footwear comprising sleepwear, footwear, outerwear, tees and hoodies, and socks; and stationery and merchandising products, as well as freight, licensing, and gift card breakage services. The company sells its Vera Bradley branded products through its full-line and outlet stores in the United States; verabradley.com, an online outlet site; its annual outlet sale in Fort Wayne, Indiana. It sells its Pura Vida branded products through wholesale retailers and Pura Vida websites, including www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca; and Vera Bradley Indirect branded products to specialty retail locations, department stores, national accounts, third party e-commerce sites, third-party inventory liquidators, and through licensing agreements. Vera Bradley, Inc. was incorporated in 1982 and is headquartered in Roanoke, Indiana.

About Abercrombie & Fitch

Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.