Contrasting American Eagle Outfitters (AEO) & Viacom, Inc. Class A (VIA)

American Eagle Outfitters (NYSE: AEO) and Viacom, Inc. Class A (NASDAQ:VIA) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for American Eagle Outfitters and Viacom, Inc. Class A, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Eagle Outfitters 1 7 10 0 2.50
Viacom, Inc. Class A 2 1 1 0 1.75

American Eagle Outfitters presently has a consensus target price of $20.41, suggesting a potential downside of 14.24%. Viacom, Inc. Class A has a consensus target price of $39.00, suggesting a potential upside of 15.73%. Given Viacom, Inc. Class A’s higher probable upside, analysts plainly believe Viacom, Inc. Class A is more favorable than American Eagle Outfitters.

Valuation & Earnings

This table compares American Eagle Outfitters and Viacom, Inc. Class A’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Eagle Outfitters $3.80 billion 1.11 $204.16 million $1.16 20.52
Viacom, Inc. Class A $13.26 billion 1.02 $1.87 billion N/A N/A

Viacom, Inc. Class A has higher revenue and earnings than American Eagle Outfitters.

Profitability

This table compares American Eagle Outfitters and Viacom, Inc. Class A’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Eagle Outfitters 5.67% 18.65% 12.57%
Viacom, Inc. Class A 16.74% 24.97% 6.76%

Dividends

American Eagle Outfitters pays an annual dividend of $0.55 per share and has a dividend yield of 2.3%. Viacom, Inc. Class A pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. American Eagle Outfitters pays out 47.4% of its earnings in the form of a dividend.

Risk & Volatility

American Eagle Outfitters has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Viacom, Inc. Class A has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

85.4% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 2.3% of Viacom, Inc. Class A shares are held by institutional investors. 6.3% of American Eagle Outfitters shares are held by company insiders. Comparatively, 0.7% of Viacom, Inc. Class A shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Viacom, Inc. Class A beats American Eagle Outfitters on 8 of the 15 factors compared between the two stocks.

American Eagle Outfitters Company Profile

American Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle Outfitters and Aerie brands. The company also provides jeans, and other apparel and accessories for men and women; and intimates, activewear, and swim collections, as well as personal care products for women. In addition, it offers sports apparel under the Tailgate brand; and menswear products under the Todd Snyder New York brand name. As of March 8, 2018, it operated approximately 933 American Eagle Outfitters stores, 109 Aerie stand-alone stores, 4 Tailgate stand-alone stores, and 1 Todd Snyder stand-alone store in the United States, Canada, Mexico, Hong Kong, and China. It also ships to 81 countries through its Websites; and offers its merchandise at 214 locations operated by licensees in 25 countries, as well as provides products through its Websites www.ae.com, www.aerie.com, and www.ToddSnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

Viacom, Inc. Class A Company Profile

Viacom, Inc. operates media brands that create entertainment content worldwide. The company creates television programs, motion pictures, short-form content, games, consumer products, podcasts, live events, and social media experiences. It operates through two segments, Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content and related branded products for consumers through approximately 300 locally programmed and operated TV channels, including Nickelodeon, Nick Jr., MTV, BET, Comedy Central, SPIKE, VH1, TV Land, CMT, Logo, Channel 5, Telefe, Colors, Paramount Channel, TeenNick, Nicktoons, Nick Music, MTV2, MTV Classic, MTV Live, BET Her, BET Gospel, and BET Hip Hop, as well as through online, mobile, and apps. The Filmed Entertainment segment produces, finances, acquires, and distributes motion pictures, television programming, and other entertainment content under the Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television, Nickelodeon Movies, and MTV Films brands. This segment exhibits motion pictures theatrically through home entertainment, licensing to television and digital platforms, and ancillary activities. The company releases its content through DVDs, Blu-ray discs, transactional video-on-demand, subscription video-on-demand, pay television, cable television, free television, and free video-on-demand, as well as airlines and hotels. Viacom, Inc. is headquartered in New York, New York.

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