Critical Contrast: Esprit (OTCMKTS:ESPGY) vs. American Eagle Outfitters (NYSE:AEO)

Esprit (OTCMKTS:ESPGY) and American Eagle Outfitters (NYSE:AEO) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and target prices for Esprit and American Eagle Outfitters, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esprit	0	0	0	0	0.00
American Eagle Outfitters	1	13	1	0	2.00

American Eagle Outfitters has a consensus target price of $22.45, indicating a potential upside of 31.08%. Given American Eagle Outfitters’ stronger consensus rating and higher possible upside, analysts clearly believe American Eagle Outfitters is more favorable than Esprit.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Esprit	N/A	N/A	N/A
American Eagle Outfitters	3.49%	16.76%	6.62%

Insider & Institutional Ownership

97.3% of American Eagle Outfitters shares are held by institutional investors. 9.0% 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 stock is poised for long-term growth.

Earnings and Valuation

This table compares Esprit and American Eagle Outfitters”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esprit	$5.38 million	0.39	-$157.30 million	N/A	N/A
American Eagle Outfitters	$5.55 billion	0.52	$191.98 million	$1.12	15.29

American Eagle Outfitters has higher revenue and earnings than Esprit.

Dividends

Esprit pays an annual dividend of $0.09 per share and has a dividend yield of 62.7%. American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.9%. American Eagle Outfitters pays out 44.6% of its earnings in the form of a dividend. American Eagle Outfitters has increased its dividend for 2 consecutive years.

Summary

American Eagle Outfitters beats Esprit on 12 of the 14 factors compared between the two stocks.

About Esprit

Esprit Holdings Limited, an investment holding company, engages in retail and wholesale distribution, and licensing of fashion and non-apparel products. It operates through Europe; Asia; E-shop; and Corporate Services, Sourcing, Licensing and Others segments. The company offers apparel and accessories under the ESPRIT brand name through retail stores and e-commerce platforms. It is also involved in the sourcing, purchasing, distributing, and sale of merchandise; provision of financial and treasury services, as well as logistic services comprising customs dealing and quality control; design and image directions; and conceptualization and development of global uniform image businesses. Esprit Holdings Limited was founded in 1968 and is headquartered in North Point, Hong Kong.

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.