Urban Outfitters (NASDAQ: URBN) and The Children’s Place (NASDAQ:PLCE) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.
Insider and Institutional Ownership
75.7% of Urban Outfitters shares are owned by institutional investors. 25.9% of Urban Outfitters shares are owned by company insiders. Comparatively, 3.8% of The Children’s Place shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
The Children’s Place pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. Urban Outfitters does not pay a dividend. The Children’s Place pays out 25.3% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and recommmendations for Urban Outfitters and The Children’s Place, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Children’s Place||1||2||10||0||2.69|
Urban Outfitters currently has a consensus price target of $32.64, suggesting a potential downside of 22.87%. The Children’s Place has a consensus price target of $145.09, suggesting a potential upside of 5.14%. Given The Children’s Place’s stronger consensus rating and higher probable upside, analysts clearly believe The Children’s Place is more favorable than Urban Outfitters.
Volatility and Risk
Urban Outfitters has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, The Children’s Place has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.
Earnings & Valuation
This table compares Urban Outfitters and The Children’s Place’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Urban Outfitters||$3.62 billion||1.27||$108.26 million||$1.67||25.34|
|The Children’s Place||$1.87 billion||1.22||$84.69 million||$7.91||17.45|
Urban Outfitters has higher revenue and earnings than The Children’s Place. The Children’s Place is trading at a lower price-to-earnings ratio than Urban Outfitters, indicating that it is currently the more affordable of the two stocks.
This table compares Urban Outfitters and The Children’s Place’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Children’s Place||4.53%||29.03%||15.12%|
About Urban Outfitters
Urban Outfitters, Inc., a lifestyle products and services company, engages in the retail and wholesale of general consumer products. The company retails women's and men's fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28 under the Urban Outfitters brand; and women's casual apparel and accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty products for women aged 28 to 45 under the Anthropologie brand. It also provides heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations under the Bhldn brand; and lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories under the Terrain brand, as well as operates food and beverage restaurants. In addition, the company operates Free People retail stores that offer casual women's apparel, activewear, intimates, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30. It serves its customers directly through retail stores, Websites, mobile applications, catalogs, and customer contact centers. As of January 31, 2018, the company operated 45 Urban Outfitters stores in the United States, Canada, and Europe; 226 Anthropologie Group stores, including Anthropologie, Bhldn, and Terrain brands in the United States, Canada, and Europe; 132 Free People stores in the United States and Canada; and 10 food and beverage restaurants. It is also involved in the wholesale business, such as the designing, developing, and marketing of young women's contemporary casual wear and shoes under the Free People brand; and home goods under the Anthropologie brand to approximately 2,100 department and specialty stores worldwide. The company was founded in 1970 and is based in Philadelphia, Pennsylvania.
About The Children’s Place
The Children's Place, Inc. operates as a children's specialty apparel retailer. The company operates in two segments, The Children's Place U.S. and The Children's Place International. It sells apparel, accessories, footwear, and other items for children; and designs, contracts to manufacture, and sells merchandise under the proprietary The Children's Place, Place, and Baby Place brand names. As of February 3, 2018, the company operated 1,014 stores in the United States, Canada, and Puerto Rico; and 190 international points of distribution operated by its 7 franchise partners in 19 countries. It also sells its products through childrensplace.com, an online store. The company was formerly known as The Children's Place Retail Stores, Inc. and changed its name to The Children's Place, Inc. in June 2014. The Children's Place, Inc. was founded in 1969 and is headquartered in Secaucus, New Jersey.
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