Analyzing Central Garden & Pet (NASDAQ:CENT) and Luvu Brands (OTCMKTS:LUVU)

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

Insider and Institutional Ownership

16.1% of Central Garden & Pet shares are held by institutional investors. 8.2% of Central Garden & Pet shares are held by insiders. Comparatively, 45.9% of Luvu Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Central Garden & Pet and Luvu Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Garden & Pet	0	2	1	0	2.33
Luvu Brands	0	0	0	0	0.00

Central Garden & Pet presently has a consensus target price of $40.00, suggesting a potential upside of 12.20%. Given Central Garden & Pet’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Central Garden & Pet is more favorable than Luvu Brands.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Central Garden & Pet	4.44%	10.77%	4.65%
Luvu Brands	-1.28%	-11.34%	-3.43%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Garden & Pet	$3.12 billion	0.72	$107.98 million	$2.20	16.20
Luvu Brands	$24.57 million	0.12	-$400,000.00	N/A	N/A

Central Garden & Pet has higher revenue and earnings than Luvu Brands.

Volatility & Risk

Central Garden & Pet has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Luvu Brands has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Summary

Central Garden & Pet beats Luvu Brands on 10 of the 12 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 Luvu Brands

Luvu Brands, Inc. designs, manufactures, and markets various consumer lifestyle products worldwide. The company offers sensuality and intimacy products under the Liberator brand; and bed therapy products, which assistive in relieving medical conditions associated with acid reflux, surgery recovery, and chronic pain under the Avana brand. It also provides daybeds, sofas, and beanbags made from virgin and re-purposed polyurethane foam under the Jaxx brand. In addition, the company is involved in the purchase and resale of products to e-merchants, retailers, and e-commerce sites, as well as provision of contract manufacturing and fulfillment services. It markets its products through various websites comprising liberator.com, jaxxliving.com, and avanacomfort.com, as well as through distributors, retailers, and e-tailers across various channels of adult, mass market, drug, and specialty accounts. The company was formerly known as Liberator, Inc. and changed its name to Luvu Brands, Inc. in November 2015. Luvu Brands, Inc. was incorporated in 1999 and is headquartered in Atlanta, Georgia.