Central Garden & Pet (NASDAQ: CENT) and Kellogg (NYSE:K) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Dividends

Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.5%. Central Garden & Pet does not pay a dividend. Kellogg pays out 96.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Central Garden & Pet has increased its dividend for 12 consecutive years.

Earnings and Valuation

This table compares Central Garden & Pet and Kellogg’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Central Garden & Pet $1.98 billion 1.00 $202.40 million $1.33 28.71
Kellogg $12.79 billion 1.69 $2.27 billion $2.24 27.92

Kellogg has higher revenue and earnings than Central Garden & Pet. Kellogg 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.

Analyst Ratings

This is a summary of current ratings for Central Garden & Pet and Kellogg, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Central Garden & Pet 0 3 2 0 2.40
Kellogg 2 7 2 0 2.00

Central Garden & Pet currently has a consensus price target of $38.33, indicating a potential upside of 0.40%. Kellogg has a consensus price target of $71.36, indicating a potential upside of 14.13%. Given Kellogg’s higher probable upside, analysts plainly believe Kellogg is more favorable than Central Garden & Pet.

Institutional and Insider Ownership

20.2% of Central Garden & Pet shares are owned by institutional investors. Comparatively, 85.2% of Kellogg shares are owned by institutional investors. 11.6% of Central Garden & Pet shares are owned by insiders. Comparatively, 1.3% of Kellogg shares are owned 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.

Risk and Volatility

Central Garden & Pet has a beta of 0.03, suggesting that its share price is 97% less volatile than the S&P 500. Comparatively, Kellogg has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Profitability

This table compares Central Garden & Pet and Kellogg’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%
Kellogg 6.15% 73.92% 9.27%

Summary

Kellogg beats Central Garden & Pet on 11 of the 16 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 Kellogg

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

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