Abercrombie & Fitch (ANF) vs. Nordstrom (JWN) Head to Head Analysis

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

Analyst Ratings

This is a summary of recent ratings for Nordstrom and Abercrombie & Fitch, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordstrom 1 11 5 0 2.24
Abercrombie & Fitch 5 10 3 0 1.89

Nordstrom currently has a consensus price target of $48.71, indicating a potential downside of 5.19%. Abercrombie & Fitch has a consensus price target of $19.95, indicating a potential downside of 19.44%. Given Nordstrom’s stronger consensus rating and higher possible upside, research analysts plainly believe Nordstrom is more favorable than Abercrombie & Fitch.

Earnings & Valuation

This table compares Nordstrom and Abercrombie & Fitch’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nordstrom $15.14 billion 0.57 $437.00 million $2.96 17.36
Abercrombie & Fitch $3.49 billion 0.48 $7.09 million $0.65 38.09

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

Risk & Volatility

Nordstrom has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Institutional and Insider Ownership

56.5% of Nordstrom shares are owned by institutional investors. 7.1% of Nordstrom shares are owned by insiders. Comparatively, 1.0% of Abercrombie & Fitch shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Nordstrom pays an annual dividend of $1.48 per share and has a dividend yield of 2.9%. Abercrombie & Fitch pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Nordstrom pays out 50.0% of its earnings in the form of a dividend. 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Nordstrom 2.96% 55.75% 6.33%
Abercrombie & Fitch 0.74% 5.72% 3.02%

Summary

Nordstrom beats Abercrombie & Fitch on 14 of the 16 factors compared between the two stocks.

Nordstrom Company Profile

Nordstrom, Inc., a fashion retailer, provides apparel, shoes, cosmetics, and accessories for women, men, young adults, and children in the United States and Canada. The company operates in two segments, Retail and Credit. The Retail segment offers a range of brand name and private label merchandise through various channels, including Nordstrom branded full-line stores and online store at Nordstrom.com; Nordstrom Rack stores; Nordstromrack.com and HauteLook; Trunk Club clubhouses and TrunkClub.com; Jeffrey boutiques; and clearance stores that operate under the Last Chance name. The Credit segment provides access to various payment products and services, including Nordstrom-branded Visa credit cards, a Nordstrom-branded private label credit card, and a debit card. As of April 12, 2018, the company operated 370 stores in 40 states, including 122 full-line stores; 236 Nordstrom Rack stores; 2 Jeffrey boutiques; 2 clearance stores; 7 Trunk Club clubhouses; and Nordstrom Local service concept. Nordstrom, Inc. was founded in 1901 and is headquartered in Seattle, Washington.

Abercrombie & Fitch Company Profile

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.

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