Central Garden & Pet (NASDAQ: CENT) and Mondelez International (NASDAQ:MDLZ) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Insider and Institutional Ownership

20.2% of Central Garden & Pet shares are owned by institutional investors. Comparatively, 75.9% of Mondelez International shares are owned by institutional investors. 11.6% of Central Garden & Pet shares are owned by company insiders. Comparatively, 3.6% of Mondelez International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Central Garden & Pet has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, Mondelez International has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Earnings and Valuation

This table compares Central Garden & Pet and Mondelez International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Central Garden & Pet $1.98 billion 0.93 $202.40 million $1.33 26.67
Mondelez International $25.57 billion 2.40 $4.37 billion $1.14 35.64

Mondelez International has higher revenue and earnings than Central Garden & Pet. Central Garden & Pet is trading at a lower price-to-earnings ratio than Mondelez International, indicating that it is currently the more affordable of the two stocks.

Dividends

Mondelez International pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. Central Garden & Pet does not pay a dividend. Mondelez International pays out 66.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Central Garden & Pet and Mondelez International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Central Garden & Pet 0 2 3 0 2.60
Mondelez International 0 2 7 1 2.90

Central Garden & Pet presently has a consensus target price of $38.33, indicating a potential upside of 8.07%. Mondelez International has a consensus target price of $50.50, indicating a potential upside of 24.29%. Given Mondelez International’s stronger consensus rating and higher possible upside, analysts clearly believe Mondelez International is more favorable than Central Garden & Pet.

Profitability

This table compares Central Garden & Pet and Mondelez International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Central Garden & Pet 3.49% 13.66% 6.13%
Mondelez International 6.92% 11.96% 5.00%

Summary

Mondelez International beats Central Garden & Pet on 11 of the 17 factors compared between the two stocks.

About Central Garden & Pet

Central Garden & Pet Company is a marketer and producer of branded products and distributor of third party products in the pet and lawn and garden supplies industries in the United States. The Company operates in two segments: Pet segment and the Garden segment. It is a marketer and producer of pet supplies in the United States. In addition, its Pet segment operates sales and logistics networks in the industry strategically supporting its brands. Its principal pet supplies categories are dog and cat, aquatics, bird and small animal, wild bird feed and animal health products. The Company markets and produces various brands, including Pennington, The Rebels, AMDRO, Lilly Miller, Ironite, Sevin, and Over-N-Out. Its Garden segment operates a sales and logistics network that strategically supports its brands. The Company’s principal lawn and garden product lines include grass seed, wild bird feed and insect control products.

About Mondelez International

Mondelez International, Inc. is a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries.

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