Head to Head Review: American Eagle Outfitters (NYSE:AEO) versus Burberry Group (OTCMKTS:BURBY)

American Eagle Outfitters (NYSE:AEO) and Burberry Group (OTCMKTS:BURBY) are both mid-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Eagle Outfitters	$5.33 billion	0.81	$329.38 million	$1.16	21.95
Burberry Group	$3.14 billion	1.97	-$95.68 million	N/A	N/A

American Eagle Outfitters has higher revenue and earnings than Burberry Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Eagle Outfitters	3.90%	13.82%	5.59%
Burberry Group	N/A	N/A	N/A

Dividends

American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.0%. Burberry Group pays an annual dividend of $0.52 per share and has a dividend yield of 3.0%. American Eagle Outfitters pays out 43.1% of its earnings in the form of a dividend. American Eagle Outfitters has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

97.3% of American Eagle Outfitters shares are owned by institutional investors. Comparatively, 10.3% of Burberry Group shares are owned by institutional investors. 8.7% of American Eagle Outfitters shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

American Eagle Outfitters has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Burberry Group has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for American Eagle Outfitters and Burberry Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Eagle Outfitters	2	11	1	1	2.07
Burberry Group	0	1	0	4	3.60

American Eagle Outfitters currently has a consensus price target of $22.45, indicating a potential downside of 11.80%. Given American Eagle Outfitters’ higher probable upside, analysts clearly believe American Eagle Outfitters is more favorable than Burberry Group.

Summary

American Eagle Outfitters beats Burberry Group on 11 of the 16 factors compared between the two stocks.

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.

About Burberry Group

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. The company was founded in 1856 and is headquartered in London, the United Kingdom.