Abercrombie & Fitch (ANF) and TJX Companies (TJX) Financial Contrast

Abercrombie & Fitch (NYSE: ANF) and TJX Companies (NYSE:TJX) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Dividends

Abercrombie & Fitch pays an annual dividend of $0.80 per share and has a dividend yield of 3.1%. TJX Companies pays an annual dividend of $1.56 per share and has a dividend yield of 1.8%. Abercrombie & Fitch pays out 123.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TJX Companies pays out 38.6% of its earnings in the form of a dividend. TJX Companies has raised its dividend for 21 consecutive years.

Institutional & Insider Ownership

99.3% of Abercrombie & Fitch shares are owned by institutional investors. Comparatively, 90.3% of TJX Companies shares are owned by institutional investors. 0.6% of Abercrombie & Fitch shares are owned by insiders. Comparatively, 0.2% of TJX Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Abercrombie & Fitch and TJX Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abercrombie & Fitch 5 12 3 0 1.90
TJX Companies 0 5 16 0 2.76

Abercrombie & Fitch currently has a consensus target price of $18.29, suggesting a potential downside of 28.15%. TJX Companies has a consensus target price of $89.05, suggesting a potential upside of 1.07%. Given TJX Companies’ stronger consensus rating and higher possible upside, analysts plainly believe TJX Companies is more favorable than Abercrombie & Fitch.

Profitability

This table compares Abercrombie & Fitch and TJX Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Abercrombie & Fitch 0.20% 4.86% 2.57%
TJX Companies 7.58% 56.91% 20.32%

Volatility & Risk

Abercrombie & Fitch has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, TJX Companies has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Earnings and Valuation

This table compares Abercrombie & Fitch and TJX Companies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Abercrombie & Fitch $3.49 billion 0.49 $7.09 million $0.65 39.15
TJX Companies $35.86 billion 1.54 $2.61 billion $4.04 21.81

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

Summary

TJX Companies beats Abercrombie & Fitch on 12 of the 17 factors compared between the two stocks.

About Abercrombie & Fitch

Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer. The Company operates in two segments, Hollister and Abercrombie. It offers apparel, intimates, personal care products, and accessories for men, women, and kids under the Hollister, Abercrombie & Fitch, abercrombie kids, and Gilly Hicks brand names. As of March 7, 2018, it operated approximately 850 stores in North America, Europe, Asia, and the Middle East. The company sells products through its stores and direct-to-consumer operations; various third-party wholesale, franchise, and licensing arrangements; and e-commerce sites, including abercrombie.com and hollisterco.com. Abercrombie & Fitch Co. was founded in 1892 and is headquartered in New Albany, Ohio.

About TJX Companies

The TJX Companies, Inc. operates as an off-price apparel and home fashions retailer. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. The company sells family apparel, including footwear and accessories; home fashions, such as home basics, accent furniture, lamps, rugs, wall décor, decorative accessories, giftware, lighting, soft home, tabletop, and cookware, as well as expanded pet, kids, and gourmet food departments; jewelry; and other merchandise. It operates stores under the T.J. Maxx, Marshalls, HomeGoods, Winners, HomeSense, T.K. Maxx, and Sierra Trading Post names, as well as operates e-commerce sites tjmaxx.com, tkmaxx.com, and sierratradingpost.com. As of February 3, 2018, the company operated a total of 4,070 stores in 9 countries, including the United States, Canada, the United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands, and Australia. The TJX Companies, Inc. was founded in 1956 and is headquartered in Framingham, Massachusetts.

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