Contrasting Victoria’s Secret & Co. (NYSE:VSCO) & Abercrombie & Fitch (NYSE:ANF)

Victoria’s Secret & Co. (NYSE:VSCO) and Abercrombie & Fitch (NYSE:ANF) are both mid-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Risk & Volatility

Victoria’s Secret & Co. has a beta of 2.26, meaning that its share price is 126% more volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Victoria’s Secret & Co. and Abercrombie & Fitch, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Victoria’s Secret & Co.	0	6	6	1	2.62
Abercrombie & Fitch	0	5	8	0	2.62

Victoria’s Secret & Co. currently has a consensus price target of $60.20, indicating a potential upside of 16.83%. Abercrombie & Fitch has a consensus price target of $117.82, indicating a potential upside of 13.60%. Given Victoria’s Secret & Co.’s higher probable upside, research analysts clearly believe Victoria’s Secret & Co. is more favorable than Abercrombie & Fitch.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Victoria’s Secret & Co.	2.45%	33.55%	5.14%
Abercrombie & Fitch	9.63%	36.36%	14.26%

Valuation & Earnings

This table compares Victoria’s Secret & Co. and Abercrombie & Fitch”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Victoria’s Secret & Co.	$6.55 billion	0.63	$161.00 million	$1.86	27.70
Abercrombie & Fitch	$5.27 billion	0.88	$506.92 million	$10.54	9.84

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

Insider & Institutional Ownership

90.3% of Victoria’s Secret & Co. shares are owned by institutional investors. 0.5% of Victoria’s Secret & Co. shares are owned by insiders. Comparatively, 2.3% 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.

Summary

Abercrombie & Fitch beats Victoria’s Secret & Co. on 8 of the 14 factors compared between the two stocks.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.

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.