L Brands (NYSE: LTD) and Buckle, Inc. (The) (NYSE:BKE) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Valuation & Earnings

This table compares L Brands and Buckle, Inc. (The)’s revenue, earnings per share (EPS) 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
Buckle, Inc. (The) $927.07 million 0.85 $167.12 million $1.80 9.08

Buckle, Inc. (The) has higher revenue and earnings than L Brands.

Profitability

This table compares L Brands and Buckle, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L Brands 5.05% N/A 7.13%
Buckle, Inc. (The) 9.40% 19.96% 15.04%

Dividends

Buckle, Inc. (The) pays an annual dividend of $1.00 per share and has a dividend yield of 6.1%. L Brands does not pay a dividend. Buckle, Inc. (The) pays out 55.6% of its earnings in the form of a dividend. L Brands has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for L Brands and Buckle, Inc. (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L Brands 0 0 0 0 N/A
Buckle, Inc. (The) 1 0 0 0 1.00

Buckle, Inc. (The) has a consensus price target of $13.00, suggesting a potential downside of 20.49%. Given Buckle, Inc. (The)’s higher probable upside, analysts clearly believe Buckle, Inc. (The) is more favorable than L Brands.

Institutional & Insider Ownership

59.5% of Buckle, Inc. (The) shares are held by institutional investors. 41.7% of Buckle, Inc. (The) shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Buckle, Inc. (The) beats L Brands on 8 of the 10 factors compared between the two stocks.

L Brands Company Profile

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.

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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