Central Garden & Pet (NASDAQ: CENT) and SunOpta (NASDAQ:STKL) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Risk & Volatility

Central Garden & Pet has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500. Comparatively, SunOpta has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500.

Profitability

This table compares Central Garden & Pet and SunOpta’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%
SunOpta -3.70% -0.70% -0.23%

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Central Garden & Pet 0 1 3 0 2.75
SunOpta 0 2 3 0 2.60

Central Garden & Pet presently has a consensus price target of $38.33, indicating a potential upside of 11.89%. SunOpta has a consensus price target of $8.88, indicating a potential upside of 0.28%. Given Central Garden & Pet’s stronger consensus rating and higher possible upside, research analysts clearly believe Central Garden & Pet is more favorable than SunOpta.

Insider and Institutional Ownership

20.9% of Central Garden & Pet shares are held by institutional investors. Comparatively, 87.2% of SunOpta shares are held by institutional investors. 11.6% of Central Garden & Pet shares are held by insiders. Comparatively, 1.9% of SunOpta shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Central Garden & Pet and SunOpta’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Central Garden & Pet $1.98 billion 0.90 $202.40 million $1.33 25.76
SunOpta $1.31 billion 0.58 $70.04 million ($0.64) -13.83

Central Garden & Pet has higher revenue and earnings than SunOpta. SunOpta 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 SunOpta on 10 of the 12 factors compared between the two stocks.

Central Garden & Pet Company Profile

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.

SunOpta Company Profile

Sunopta Inc is a Canada-based company, which operates businesses focused on a healthy products portfolio. It operates through the following segments: Global Ingredients and Consumer Products. The Global Ingredients segment aggregates its North American and international raw material sourcing and supply operating segments focused on the procurement, processing and sale of specialty and organic grains, seeds, fruits, grain- and cocoa-based ingredients, and other commodities. The Consumer Products segment provides healthy and organic food products that are consumer-packaged to retailers, foodservice distributors and food manufacturers with a range of branded and private label products. It is focused on sourcing non-genetically modified (non-GMO) and organic ingredients, and manufacturing healthy food and beverage products. It manufactures packaged products focused on the healthy beverage, healthy fruit and healthy snack categories.

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