Reviewing American Eagle Outfitters (NYSE:AEO) and Canada Goose (NYSE:GOOS)

American Eagle Outfitters (NYSE:AEO) and Canada Goose (NYSE:GOOS) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, profitability, risk, analyst recommendations, dividends and institutional ownership.

Institutional & Insider Ownership

97.3% of American Eagle Outfitters shares are owned by institutional investors. Comparatively, 83.6% of Canada Goose shares are owned by institutional investors. 8.7% of American Eagle Outfitters shares are owned by insiders. Comparatively, 0.5% of Canada Goose shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares American Eagle Outfitters and Canada Goose’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Eagle Outfitters	3.74%	13.67%	5.80%
Canada Goose	1.96%	15.35%	4.62%

Earnings and Valuation

This table compares American Eagle Outfitters and Canada Goose”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Eagle Outfitters	$5.27 billion	0.60	$329.38 million	$1.04	17.87
Canada Goose	$969.08 million	1.25	$68.13 million	$0.18	69.53

American Eagle Outfitters has higher revenue and earnings than Canada Goose. American Eagle Outfitters is trading at a lower price-to-earnings ratio than Canada Goose, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for American Eagle Outfitters and Canada Goose, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Eagle Outfitters	3	9	1	1	2.00
Canada Goose	2	3	4	1	2.40

American Eagle Outfitters currently has a consensus price target of $15.11, indicating a potential downside of 18.67%. Canada Goose has a consensus price target of $15.00, indicating a potential upside of 19.86%. Given Canada Goose’s stronger consensus rating and higher possible upside, analysts plainly believe Canada Goose is more favorable than American Eagle Outfitters.

Volatility & Risk

American Eagle Outfitters has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500. Comparatively, Canada Goose has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

About American Eagle Outfitters

American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

About Canada Goose

Canada Goose Holdings Inc., together with its subsidiaries, designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Asia Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Direct-to-Consumer, Wholesale, and Other. It offers parkas, lightweight down jackets, rainwear, windwear, apparel, fleece, footwear, and accessories for fall, winter, and spring seasons. The company operates through national e-commerce markets and directly operated retail stores. Canada Goose Holdings Inc. was founded in 1957 and is headquartered in Toronto, Canada.