Stein Mart (SMRT) versus American Eagle Outfitters (AEO) Financial Contrast
Stein Mart (NASDAQ: SMRT) and American Eagle Outfitters (NYSE:AEO) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Institutional and Insider Ownership
33.0% of Stein Mart shares are held by institutional investors. Comparatively, 83.9% of American Eagle Outfitters shares are held by institutional investors. 34.7% of Stein Mart shares are held by company insiders. Comparatively, 5.8% of American Eagle Outfitters shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility & Risk
Stein Mart has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, American Eagle Outfitters has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.
Valuation and Earnings
This table compares Stein Mart and American Eagle Outfitters’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Stein Mart||$1.33 billion||0.04||$326,000.00||($0.55)||-2.16|
|American Eagle Outfitters||$3.64 billion||0.63||$479.75 million||$0.97||13.39|
American Eagle Outfitters has higher revenue and earnings than Stein Mart. Stein Mart is trading at a lower price-to-earnings ratio than American Eagle Outfitters, indicating that it is currently the more affordable of the two stocks.
Stein Mart pays an annual dividend of $0.15 per share and has a dividend yield of 12.6%. American Eagle Outfitters pays an annual dividend of $0.50 per share and has a dividend yield of 3.8%. Stein Mart pays out -27.3% of its earnings in the form of a dividend. American Eagle Outfitters pays out 51.5% 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. Stein Mart is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Stein Mart and American Eagle Outfitters’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Eagle Outfitters||4.85%||18.25%||12.17%|
This is a summary of recent ratings and recommmendations for Stein Mart and American Eagle Outfitters, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Eagle Outfitters||3||8||9||0||2.30|
American Eagle Outfitters has a consensus price target of $14.76, indicating a potential upside of 13.65%. Given American Eagle Outfitters’ higher probable upside, analysts plainly believe American Eagle Outfitters is more favorable than Stein Mart.
American Eagle Outfitters beats Stein Mart on 11 of the 14 factors compared between the two stocks.
Stein Mart Company Profile
Stein Mart, Inc. is a national retailer offering the fashion merchandise, service and presentation of a department or specialty store. The Company offers apparel for women and men, as well as accessories, shoes and home fashions. The Company’s target customers are women over 45 years old. The Company operates approximately 280 stores in over 30 states and an Internet store. Its stores are located in the Northeast, Midwest, Southeast, Texas and the Southwest. It is concentrated in the Southeast and Texas where over 180 of its stores are located. The Company’s stores offer a range of services, such as merchandise locator service, a Preferred Customer program, co-branded and private label credit card programs, and electronic gift cards. The Company’s merchants purchase products from approximately 1,200 vendors. It leases all of its store locations, generally for approximately 10 years with options to extend the lease term for over two or five year periods.
American Eagle Outfitters Company Profile
American Eagle Outfitters, Inc. (AEO Inc.) is a multi-brand specialty retailer. The Company offers a range of apparel and accessories for men and women under the American Eagle Outfitters Brand (AEO Brand), and intimates, apparel and personal care products for women under the Aerie brand. AEO Inc. operates stores in the United States, Canada, Mexico, Hong Kong, China and the United Kingdom. As of January 28, 2017, the Company operated over 1,000 retail stores and online at ae.com and aerie.com in the United States and internationally. Its company-owned retail stores are located in shopping malls, lifestyle centers and street locations in the United States, Canada, Mexico, China, Hong Kong and the United Kingdom. Its other brands include Tailgate and Todd Snyder New York. Tailgate is an apparel brand with a college town store concept. Todd Snyder New York is a menswear brand. As of January 28, 2017, the AEO brand operated 943 stores and online at www.ae.com.
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