L Brands (NYSE: LTD) and Urban Outfitters (NASDAQ:URBN) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Earnings and Valuation

This table compares L Brands and Urban Outfitters’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
L Brands N/A N/A N/A N/A N/A
Urban Outfitters $3.53 billion 0.62 $399.40 million $1.49 12.71

Urban Outfitters has higher revenue and earnings than L Brands.

Insider and Institutional Ownership

84.0% of Urban Outfitters shares are owned by institutional investors. 26.3% of Urban Outfitters shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares L Brands and Urban Outfitters’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L Brands 3.86% N/A 4.70%
Urban Outfitters 4.92% 13.64% 9.29%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for L Brands and Urban Outfitters, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L Brands 0 0 0 0 N/A
Urban Outfitters 2 18 8 0 2.21

Urban Outfitters has a consensus target price of $24.32, indicating a potential upside of 28.41%. Given Urban Outfitters’ higher possible upside, analysts clearly believe Urban Outfitters is more favorable than L Brands.

Summary

Urban Outfitters beats L Brands on 8 of the 8 factors compared between the two stocks.

About L Brands

L Brands, Inc. operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners. It operates in the retail brands, which include Victoria’s Secret, PINK, Bath & Body Works and La Senza. La Senza is a specialty retailer of women’s intimate apparel. It sells its La Senza products at over 120 La Senza stores in Canada. Henri Bendel sells handbags, jewelry and other accessory products through New York and 28 other stores. Mast Global is a merchandise sourcing and production function serving the Company and its international partners.

About Urban Outfitters

Urban Outfitters, Inc. is a lifestyle specialty retail company. The Company operates through two segments: Retail and Wholesale. The Company’s Retail segment consists of its Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn brands, whose merchandise is sold to its customers through retail stores, Websites, mobile applications, catalogs and customer contact centers. The Retail segment also includes Vetri Family, which operates restaurants under the names Amis, Alla Spina, Lo Spiedo, Pizzeria Vetri and Osteria. Its Wholesale segment consists of the Free People wholesale division that primarily designs, develops and markets young women’s contemporary casual apparel and shoes through individual and chain specialty stores and department stores. The Company’s Wholesale segment includes Free People-branded tops, bottoms, sweaters, dresses, intimates, shoes and activewear, which are sold through department and specialty stores around the world, and its Free People stores.

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