Tandy Leather Factory (NASDAQ:TLF) versus Abercrombie & Fitch (NYSE:ANF) Financial Analysis

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tandy Leather Factory	-2.94%	-4.31%	-2.74%
Abercrombie & Fitch	9.63%	36.36%	14.26%

Volatility & Risk

Tandy Leather Factory has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Tandy Leather Factory and Abercrombie & Fitch, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	1	0	0	0	1.00
Abercrombie & Fitch	0	5	8	0	2.62

Abercrombie & Fitch has a consensus target price of $117.18, suggesting a potential upside of 62.47%. Given Abercrombie & Fitch’s stronger consensus rating and higher possible upside, analysts plainly believe Abercrombie & Fitch is more favorable than Tandy Leather Factory.

Insider and Institutional Ownership

56.4% of Tandy Leather Factory shares are held by institutional investors. 59.9% of Tandy Leather Factory shares are held by insiders. Comparatively, 2.3% of Abercrombie & Fitch shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Tandy Leather Factory and Abercrombie & Fitch”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandy Leather Factory	$76.32 million	0.25	$9.10 million	($0.24)	-9.96
Abercrombie & Fitch	$5.27 billion	0.61	$506.92 million	$10.54	6.84

Abercrombie & Fitch has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory 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

Abercrombie & Fitch beats Tandy Leather Factory on 12 of the 14 factors compared between the two stocks.

About Tandy Leather Factory

Tandy Leather Factory, Inc. engages in the distribution of leather and related products. It offers leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It operates through North America and International geographical segments. The North America geographical segment consists of 115 stores, which offer a broad selection of products combined with leathercraft expertise in a one-stop shop. The International geographical segment comprises of similar to North America segment but generally located in light industrial areas. The company was founded by J. Wray Thompson, Sr. and Ronald C. Morgan in 1980 and is headquartered in Fort Worth, TX.

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.