MINISO Group (NYSE:MNSO) & Abercrombie & Fitch (NYSE:ANF) Critical Review

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

Profitability

This table compares MINISO Group and Abercrombie & Fitch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MINISO Group	10.78%	20.02%	8.59%
Abercrombie & Fitch	10.07%	38.01%	14.98%

Insider and Institutional Ownership

17.2% of MINISO Group shares are held by institutional investors. 73.5% of MINISO Group shares are held by company insiders. Comparatively, 2.3% of Abercrombie & Fitch shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for MINISO Group and Abercrombie & Fitch, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MINISO Group	0	2	4	1	2.86
Abercrombie & Fitch	0	6	6	0	2.50

MINISO Group currently has a consensus price target of $25.13, indicating a potential upside of 24.29%. Abercrombie & Fitch has a consensus price target of $110.10, indicating a potential downside of 5.21%. Given MINISO Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe MINISO Group is more favorable than Abercrombie & Fitch.

Dividends

MINISO Group pays an annual dividend of $0.55 per share and has a dividend yield of 2.7%. Abercrombie & Fitch pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. MINISO Group pays out 56.7% of its earnings in the form of a dividend. Abercrombie & Fitch pays out 7.7% 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.

Valuation & Earnings

This table compares MINISO Group and Abercrombie & Fitch”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MINISO Group	$19.90 billion	0.31	$364.10 million	$0.97	20.84
Abercrombie & Fitch	$5.18 billion	1.03	$566.22 million	$10.43	11.14

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

Volatility and Risk

MINISO Group has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

MINISO Group beats Abercrombie & Fitch on 9 of the 17 factors compared between the two stocks.

About MINISO Group

MINISO Group Holding Limited, an investment holding company, engages in the retail and wholesale of lifestyle products and pop toy products in China, Asia, the United States, and Europe. The company offers products in various categories, including home decor products, small electronics, textiles, accessories, beauty tools, toys, cosmetics, personal care products, snacks, fragrances and perfumes, and stationeries and gifts under the MINISO and WonderLife brand names; and blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji, sculptures, and other popular toys under the TOP TOY brand. The company was founded in 2013 and is based in Guangzhou, China.

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.