Urban Outfitters (URBN) versus Buckle (BKE) Head-To-Head Review

Urban Outfitters (NASDAQ: URBN) and Buckle (NYSE:BKE) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

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This table compares Urban Outfitters and Buckle’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Urban Outfitters 2.99% 14.19% 9.56%
Buckle 9.82% 20.98% 15.71%

Insider & Institutional Ownership

76.7% of Urban Outfitters shares are held by institutional investors. Comparatively, 64.9% of Buckle shares are held by institutional investors. 26.3% of Urban Outfitters shares are held by company insiders. Comparatively, 41.7% of Buckle shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Urban Outfitters has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Buckle has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Urban Outfitters and Buckle, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Urban Outfitters 3 13 9 0 2.24
Buckle 1 0 0 0 1.00

Urban Outfitters currently has a consensus target price of $31.48, suggesting a potential downside of 18.32%. Buckle has a consensus target price of $13.00, suggesting a potential downside of 42.35%. Given Urban Outfitters’ stronger consensus rating and higher possible upside, equities analysts plainly believe Urban Outfitters is more favorable than Buckle.

Earnings and Valuation

This table compares Urban Outfitters and Buckle’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Urban Outfitters $3.62 billion 1.16 $108.26 million $1.67 23.08
Buckle $913.38 million 1.21 $89.70 million $1.85 12.19

Urban Outfitters has higher revenue and earnings than Buckle. Buckle is trading at a lower price-to-earnings ratio than Urban Outfitters, indicating that it is currently the more affordable of the two stocks.

Dividends

Buckle pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. Urban Outfitters does not pay a dividend. Buckle pays out 54.1% of its earnings in the form of a dividend.

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.

About Buckle

The Buckle, Inc. operates as a retailer of casual apparel, footwear, and accessories for young men and women in the United States. The company markets a selection of brand name casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories, and footwear. It operates stores under the Buckle and The Buckle names. The company also sells its products through its Website, buckle.com. As of January 18, 2016, it operated 467 retail stores in 44 states. The company was formerly known as Mills Clothing, Inc. and changed its name to The Buckle, Inc. in April 1991. The Buckle, Inc. was founded in 1948 and is headquartered in Kearney, Nebraska.

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