Levi Strauss & Co. (NYSE:LEVI) & Abercrombie & Fitch (NYSE:ANF) Critical Contrast

Levi Strauss & Co. (NYSE:LEVI) and Abercrombie & Fitch (NYSE:ANF) are both mid-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation and Earnings

This table compares Levi Strauss & Co. and Abercrombie & Fitch”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	1.51	$578.10 million	$1.57	15.69
Abercrombie & Fitch	$5.27 billion	0.77	$506.92 million	$10.42	8.80

Levi Strauss & Co. has higher revenue and earnings than Abercrombie & Fitch. Abercrombie & Fitch is trading at a lower price-to-earnings ratio than Levi Strauss & Co., indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

69.1% of Levi Strauss & Co. shares are owned by institutional investors. 1.1% of Levi Strauss & Co. shares are owned by company insiders. Comparatively, 2.3% of Abercrombie & Fitch shares are owned 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.

Analyst Recommendations

This is a breakdown of current recommendations for Levi Strauss & Co. and Abercrombie & Fitch, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	3	13	0	2.81
Abercrombie & Fitch	1	4	8	0	2.54

Levi Strauss & Co. currently has a consensus target price of $26.79, suggesting a potential upside of 8.77%. Abercrombie & Fitch has a consensus target price of $112.64, suggesting a potential upside of 22.84%. Given Abercrombie & Fitch’s higher probable upside, analysts clearly believe Abercrombie & Fitch is more favorable than Levi Strauss & Co..

Profitability

This table compares Levi Strauss & Co. and Abercrombie & Fitch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	9.52%	25.35%	8.32%
Abercrombie & Fitch	9.34%	34.36%	13.50%

Volatility and Risk

Levi Strauss & Co. has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Summary

Levi Strauss & Co. beats Abercrombie & Fitch on 9 of the 14 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 Abercrombie & Fitch

Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.