Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
American Eagle Outfitters, Inc. (NYSE:AEO) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of AEO, it is a financially-sound , dividend-paying company with a a great history of performance. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on American Eagle Outfitters here.
Excellent balance sheet established dividend payer
Over the past few years, AEO has demonstrated a proven ability to generate robust returns of 21% Unsurprisingly, AEO surpassed the Specialty Retail industry return of 13%, which gives us more confidence of the company's capacity to drive earnings going forward. AEO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. Investors should not worry about AEO’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a US$2.9b market cap company. AEO has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For those seeking income streams from their portfolio, AEO is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 3.2%.
For American Eagle Outfitters, I've compiled three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for AEO’s future growth? Take a look at our free research report of analyst consensus for AEO’s outlook.
- Valuation: What is AEO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AEO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AEO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.