Reviewing American Eagle Outfitters (NYSE:AEO) and Buckle (NYSE:BKE)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Eagle Outfitters	$5.75 billion	0.63	$191.98 million	$1.96	11.00
Buckle	$1.30 billion	1.75	$209.74 million	$4.34	10.15

Buckle has lower revenue, but higher earnings than American Eagle Outfitters. Buckle 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.

Risk and Volatility

American Eagle Outfitters has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Buckle has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Institutional & Insider Ownership

97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 53.9% of Buckle shares are held by institutional investors. 8.9% of American Eagle Outfitters shares are held by company insiders. Comparatively, 38.4% of Buckle shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares American Eagle Outfitters and Buckle’s 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%
Buckle	16.62%	46.91%	20.97%

Analyst Recommendations

This is a summary of recent ratings and target prices for American Eagle Outfitters and Buckle, 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
Buckle	0	2	0	0	2.00

American Eagle Outfitters presently has a consensus price target of $19.55, indicating a potential downside of 9.36%. Buckle has a consensus price target of $46.00, indicating a potential upside of 4.43%. Given Buckle’s higher probable upside, analysts plainly believe Buckle is more favorable than American Eagle Outfitters.

Dividends

American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.3%. Buckle pays an annual dividend of $1.40 per share and has a dividend yield of 3.2%. American Eagle Outfitters pays out 25.5% of its earnings in the form of a dividend. Buckle pays out 32.3% 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 raised its dividend for 2 consecutive years.

Summary

Buckle beats American Eagle Outfitters on 9 of the 17 factors compared between the two stocks.

About American Eagle Outfitters

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.

About Buckle

The Buckle, Inc. is a specialty retailer of casual apparel, footwear and accessories. Its stores offer clothing for men and women, with a particular focus on denim, alongside tops, outerwear, shoes and fashion accessories. The company sells merchandise from national brands as well as private-label lines, and combines its in-store business with online sales. Its retail locations serve customers across the United States. Founded in Nebraska in 1948 as Mills Clothing, the company later adopted The Buckle name.