Critical Comparison: Cache (OTCMKTS:CACH) versus American Eagle Outfitters (NYSE:AEO)

Cache (OTCMKTS:CACH) and American Eagle Outfitters (NYSE:AEO) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

97.3% of American Eagle Outfitters shares are held by institutional investors. 23.0% of Cache shares are held by company insiders. Comparatively, 9.0% of American Eagle Outfitters shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cache	N/A	N/A	N/A
American Eagle Outfitters	5.01%	20.95%	8.34%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cache	N/A	N/A	N/A	N/A	N/A
American Eagle Outfitters	$5.65 billion	0.51	$191.98 million	$1.62	10.59

American Eagle Outfitters has higher revenue and earnings than Cache.

Analyst Recommendations

This is a summary of current ratings and target prices for Cache and American Eagle Outfitters, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cache	0	0	0	0	0.00
American Eagle Outfitters	1	12	1	0	2.00

American Eagle Outfitters has a consensus target price of $20.36, suggesting a potential upside of 18.69%. Given American Eagle Outfitters’ stronger consensus rating and higher possible upside, analysts plainly believe American Eagle Outfitters is more favorable than Cache.

Summary

American Eagle Outfitters beats Cache on 8 of the 9 factors compared between the two stocks.

About Cache

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman’s specialty retailer of apparel and accessories in the United States. The company designs and markets sportswear, such as tops, sweaters, and jackets and bottoms for day or evening events; dresses ranges from shorter lengths to long for day, evening, and events; and accessories, including jewelry, belts, scarves, and handbags under the Cache brand name. The company was founded in 1975 and is headquartered in New York, New York.

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.