Levi Strauss & Co. (NYSE:LEVI – Get Free Report) and American Eagle Outfitters (NYSE:AEO – Get Free Report) are both mid-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.
Valuation & Earnings
This table compares Levi Strauss & Co. and American Eagle Outfitters”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Levi Strauss & Co. | $6.28 billion | 1.22 | $578.10 million | $1.46 | 13.42 |
| American Eagle Outfitters | $5.50 billion | 0.57 | $329.38 million | $1.12 | 16.49 |
Institutional & Insider Ownership
69.1% of Levi Strauss & Co. shares are owned by institutional investors. Comparatively, 97.3% of American Eagle Outfitters shares are owned by institutional investors. 1.3% of Levi Strauss & Co. shares are owned by company insiders. Comparatively, 8.7% of American Eagle Outfitters shares are owned by company 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.
Dividends
Levi Strauss & Co. pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 2.7%. Levi Strauss & Co. pays out 38.4% of its earnings in the form of a dividend. American Eagle Outfitters pays out 44.6% 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. Levi Strauss & Co. has increased its dividend for 4 consecutive years and American Eagle Outfitters has increased its dividend for 2 consecutive years. Levi Strauss & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Levi Strauss & Co. has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for Levi Strauss & Co. and American Eagle Outfitters, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Levi Strauss & Co. | 0 | 3 | 12 | 0 | 2.80 |
| American Eagle Outfitters | 2 | 11 | 1 | 1 | 2.07 |
Levi Strauss & Co. presently has a consensus target price of $26.69, suggesting a potential upside of 36.25%. American Eagle Outfitters has a consensus target price of $21.75, suggesting a potential upside of 17.76%. Given Levi Strauss & Co.’s stronger consensus rating and higher probable upside, equities analysts plainly believe Levi Strauss & Co. is more favorable than American Eagle Outfitters.
Profitability
This table compares Levi Strauss & Co. and American Eagle Outfitters’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Levi Strauss & Co. | 9.20% | 25.08% | 8.19% |
| American Eagle Outfitters | 3.49% | 16.76% | 6.61% |
Summary
Levi Strauss & Co. beats American Eagle Outfitters on 13 of the 18 factors compared between the two stocks.
About Levi Strauss & Co.
Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.
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.
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