Kellogg (K) and Central Garden & Pet (CENT) Critical Analysis
Kellogg (NYSE: K) and Central Garden & Pet (NASDAQ:CENT) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.
This table compares Kellogg and Central Garden & Pet’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%|
Volatility and Risk
Kellogg has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.03, suggesting that its share price is 97% less volatile than the S&P 500.
Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.6%. 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. Kellogg has increased its dividend for 12 consecutive years.
This is a breakdown of current recommendations and price targets for Kellogg and Central Garden & Pet, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Central Garden & Pet||0||3||2||0||2.40|
Kellogg currently has a consensus target price of $71.36, indicating a potential upside of 18.54%. Central Garden & Pet has a consensus target price of $38.33, indicating a potential upside of 5.08%. Given Kellogg’s higher probable upside, research analysts plainly believe Kellogg is more favorable than Central Garden & Pet.
Earnings and Valuation
This table compares Kellogg and Central Garden & Pet’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Kellogg||$13.01 billion||1.60||$694.00 million||$2.24||26.88|
|Central Garden & Pet||$1.83 billion||1.03||$44.51 million||$1.33||27.43|
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.
Insider and Institutional Ownership
85.2% of Kellogg shares are held by institutional investors. Comparatively, 20.2% of Central Garden & Pet shares are held by institutional investors. 1.3% of Kellogg shares are held by insiders. Comparatively, 11.6% of Central Garden & Pet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Kellogg beats Central Garden & Pet on 12 of the 16 factors compared between the two stocks.
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.
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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