Reviewing Luvu Brands (OTCMKTS:LUVU) and Central Garden & Pet (NASDAQ:CENTA)

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

Volatility and Risk

Luvu Brands has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Insider & Institutional Ownership

50.8% of Central Garden & Pet shares are owned by institutional investors. 45.9% of Luvu Brands shares are owned by insiders. Comparatively, 20.3% of Central Garden & Pet shares are owned by 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Luvu Brands	0	0	0	0	0.00
Central Garden & Pet	1	2	2	1	2.50

Central Garden & Pet has a consensus price target of $44.00, indicating a potential upside of 36.35%. Given Central Garden & Pet’s stronger consensus rating and higher probable upside, analysts clearly believe Central Garden & Pet is more favorable than Luvu Brands.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Luvu Brands	-5.42%	-58.93%	-14.04%
Central Garden & Pet	5.04%	10.99%	4.75%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Luvu Brands	$24.69 million	0.09	-$450,000.00	($0.02)	-1.45
Central Garden & Pet	$3.13 billion	0.64	$162.84 million	$2.45	13.17

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

Summary

Central Garden & Pet beats Luvu Brands on 13 of the 15 factors compared between the two stocks.

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.

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.