Analyzing Buckle, Inc. (The) (BKE) and American Eagle Outfitters (AEO)

American Eagle Outfitters (NYSE: AEO) and Buckle, Inc. (The) (NYSE:BKE) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitabiliy, earnings and valuation.

Institutional and Insider Ownership

89.6% of American Eagle Outfitters shares are owned by institutional investors. Comparatively, 66.4% of Buckle, Inc. (The) shares are owned by institutional investors. 5.8% of American Eagle Outfitters shares are owned by insiders. Comparatively, 41.7% of Buckle, Inc. (The) shares are owned by 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.

Valuation & Earnings

This table compares American Eagle Outfitters and Buckle, Inc. (The)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Eagle Outfitters $3.62 billion 0.57 $496.35 million $1.08 10.82
Buckle, Inc. (The) $943.58 million 0.89 $174.08 million $1.88 9.26

American Eagle Outfitters has higher revenue and earnings than Buckle, Inc. (The). Buckle, Inc. (The) 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 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Buckle, Inc. (The) has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 4.3%. Buckle, Inc. (The) pays an annual dividend of $1.00 per share and has a dividend yield of 5.7%. American Eagle Outfitters pays out 46.3% of its earnings in the form of a dividend. Buckle, Inc. (The) pays out 53.2% 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. Buckle, Inc. (The) has raised its dividend for 3 consecutive years. Buckle, Inc. (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares American Eagle Outfitters and Buckle, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Eagle Outfitters 5.44% 18.95% 12.56%
Buckle, Inc. (The) 9.66% 20.95% 15.68%

Analyst Recommendations

This is a summary of current ratings and recommmendations for American Eagle Outfitters and Buckle, Inc. (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Eagle Outfitters 3 9 9 0 2.29
Buckle, Inc. (The) 0 2 0 0 2.00

American Eagle Outfitters presently has a consensus target price of $15.79, suggesting a potential upside of 35.04%. Buckle, Inc. (The) has a consensus target price of $18.50, suggesting a potential upside of 6.32%. Given American Eagle Outfitters’ stronger consensus rating and higher possible upside, equities research analysts clearly believe American Eagle Outfitters is more favorable than Buckle, Inc. (The).

Summary

American Eagle Outfitters beats Buckle, Inc. (The) on 9 of the 17 factors compared between the two stocks.

American Eagle Outfitters Company Profile

American Eagle Outfitters, Inc. (AEO Inc.) is a multi-brand specialty retailer. The Company offers a range of apparel and accessories for men and women under the American Eagle Outfitters Brand (AEO Brand), and intimates, apparel and personal care products for women under the Aerie brand. AEO Inc. operates stores in the United States, Canada, Mexico, Hong Kong, China and the United Kingdom. As of January 28, 2017, the Company operated over 1,000 retail stores and online at ae.com and aerie.com in the United States and internationally. Its company-owned retail stores are located in shopping malls, lifestyle centers and street locations in the United States, Canada, Mexico, China, Hong Kong and the United Kingdom. Its other brands include Tailgate and Todd Snyder New York. Tailgate is an apparel brand with a college town store concept. Todd Snyder New York is a menswear brand. As of January 28, 2017, the AEO brand operated 943 stores and online at www.ae.com.

Buckle, Inc. (The) Company Profile

The Buckle, Inc. is a retailer of casual apparel, footwear and accessories for young men and women. As of January 28, 2017, the Company operated 467 retail stores in 44 states throughout the United States under the names Buckle and The Buckle. The Company markets a selection of brand name casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. The Company provides customer services, such as free hemming, free gift-wrapping, easy layaways, the Buckle private label credit card, and a guest loyalty program. The Company offers denims from brands, such as Miss Me, Rock Revival, Big Star Vintage, Buffalo Jeans, KanCan, Flying Monkey and Levi’s. Its other brands include Hurley, Billabong, Affliction, American Fighter, Fast & Furious, Oakley, Fox, Puma, Obey, RVCA, Salvage, 7 Diamonds, Nixon, Amuse Society, Free People, White Crow, Corral, Reef, Kustom, Timberland, UGG, TOMS, SAXX, Stance, Lokai, Ray-Ban, and Fossil.

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