General Mills (NYSE: GIS) and Central Garden & Pet (NASDAQ:CENT) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
General Mills $15.48 billion 1.89 $3.32 billion $2.79 18.48
Central Garden & Pet $1.98 billion 1.00 $202.40 million $1.33 28.89

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

Institutional & Insider Ownership

70.4% of General Mills shares are owned by institutional investors. Comparatively, 20.2% of Central Garden & Pet shares are owned by institutional investors. 1.4% of General Mills shares are owned by company insiders. Comparatively, 11.6% of Central Garden & Pet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

General Mills pays an annual dividend of $1.96 per share and has a dividend yield of 3.8%. Central Garden & Pet does not pay a dividend. General Mills pays out 70.3% of its earnings in the form of a dividend. General Mills has increased its dividend for 13 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for General Mills and Central Garden & Pet, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Mills 3 13 1 0 1.88
Central Garden & Pet 0 3 2 0 2.40

General Mills presently has a consensus target price of $56.27, suggesting a potential upside of 9.11%. Central Garden & Pet has a consensus target price of $38.33, suggesting a potential downside of 0.25%. Given General Mills’ higher probable upside, equities analysts plainly believe General Mills is more favorable than Central Garden & Pet.

Profitability

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

Net Margins Return on Equity Return on Assets
General Mills 10.68% 39.82% 8.16%
Central Garden & Pet 3.49% 13.66% 6.13%

Risk & Volatility

General Mills has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500.

Summary

General Mills beats Central Garden & Pet on 12 of the 17 factors compared between the two stocks.

About General Mills

General Mills, Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. The Company is a supplier of branded and unbranded food products to the North American foodservice and commercial baking industries. The Company has three segments: U.S. Retail, International, and Convenience Stores and Foodservice. Its products are marketed under various brands, which include Annie’s and Betty Crocker. The Company’s U.S. Retail segment reflects business with a range of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, and e-commerce grocery providers operating throughout the United States. The International segment consists of retail and foodservice businesses outside of the United States. The Convenience Stores and Foodservice segment’s product categories include ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, and baking mixes.

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.

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