Head-To-Head Review: Central Garden & Pet (NASDAQ:CENTA) versus Spectrum Brands (NYSE:SPB)

Central Garden & Pet (NASDAQ:CENTA) and Spectrum Brands (NYSE:SPB) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

50.8% of Central Garden & Pet shares are held by institutional investors. 20.3% of Central Garden & Pet shares are held by insiders. Comparatively, 3.9% of Spectrum Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Central Garden & Pet and Spectrum Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Central Garden & Pet	5.42%	11.55%	5.04%
Spectrum Brands	4.47%	8.23%	4.53%

Valuation and Earnings

This table compares Central Garden & Pet and Spectrum Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Garden & Pet	$3.13 billion	0.75	$162.84 million	$2.75	13.71
Spectrum Brands	$2.81 billion	0.69	$99.70 million	$5.24	15.87

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

Analyst Ratings

This is a summary of recent ratings and target prices for Central Garden & Pet and Spectrum Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Garden & Pet	1	1	2	2	2.83
Spectrum Brands	0	3	3	0	2.50

Central Garden & Pet presently has a consensus price target of $45.00, indicating a potential upside of 19.33%. Spectrum Brands has a consensus price target of $86.00, indicating a potential upside of 3.42%. Given Central Garden & Pet’s stronger consensus rating and higher possible upside, research analysts clearly believe Central Garden & Pet is more favorable than Spectrum Brands.

Volatility & Risk

Central Garden & Pet has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Spectrum Brands has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Summary

Central Garden & Pet beats Spectrum Brands on 11 of the 15 factors compared between the two stocks.

About Central Garden & Pet

Central Garden & Pet Co. engages in the production and distribution of branded and private label products for the lawn, garden, and pet supplies markets. It operates through the Pet and Garden segments. The Pet segment focuses on dog and cat supplies such as dog treats and chews, toys, pet beds and containment, grooming products, waste management and training pads, supplies for aquatics, small animals, reptiles and pet birds including toys, cages and habitats, bedding, food and supplements, products for equine and livestock, animal and household health and insect control products, live fish, and small animals, as well as outdoor cushions. The Garden segment includes lawn and garden consumables such as grass, vegetable, flower and herb seed, wild bird feed, bird houses and other birding accessories, weed, grass, and other herbicides, insecticide and pesticide products, fertilizers, and live plants. The company was founded by William E. Brown in 1980 and is headquartered in Walnut Creek, CA.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.