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How American Eagle Outfitters Inc (NYSE:AEO) Can Add Value To Your Portfolio

I’ve been keeping an eye on American Eagle Outfitters Inc (NYSE:AEO) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe AEO has a lot to offer. Basically, it is a financially-sound , dividend-paying company with a a great track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on American Eagle Outfitters here.

Flawless balance sheet with solid track record and pays a dividend

AEO delivered a bottom-line expansion of 11.74% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did AEO outperformed its past performance, its growth also exceeded the Specialty Retail industry expansion, which generated a 5.85% earnings growth. This paints a buoyant picture for the company. AEO’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that AEO manages its cash and cost levels well, which is an important determinant of the company’s health. Looking at AEO’s capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is rather impressive for a US$4.21B market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

NYSE:AEO Income Statement Jun 19th 18
NYSE:AEO Income Statement Jun 19th 18

AEO is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.

NYSE:AEO Historical Dividend Yield Jun 19th 18
NYSE:AEO Historical Dividend Yield Jun 19th 18

Next Steps:

For American Eagle Outfitters, there are three fundamental aspects you should further examine:

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  1. 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.

  2. 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.

  3. 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!


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.