Ingredion (NYSE: INGR) and Central Garden & Pet (NASDAQ:CENT) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Ingredion 8.35% 20.84% 9.53%
Central Garden & Pet 3.49% 13.66% 6.13%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ingredion $5.80 billion 1.54 $1.05 billion $6.65 18.77
Central Garden & Pet $1.98 billion 0.94 $202.40 million $1.33 26.99

Ingredion has higher revenue and earnings than Central Garden & Pet. Ingredion 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

84.3% of Ingredion shares are owned by institutional investors. Comparatively, 20.2% of Central Garden & Pet shares are owned by institutional investors. 1.9% of Ingredion shares are owned by insiders. Comparatively, 11.6% of Central Garden & Pet shares are owned 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.

Volatility & Risk

Ingredion has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ingredion and Central Garden & Pet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingredion 0 2 2 0 2.50
Central Garden & Pet 0 2 3 0 2.60

Ingredion currently has a consensus price target of $141.67, suggesting a potential upside of 13.48%. Central Garden & Pet has a consensus price target of $38.33, suggesting a potential upside of 6.81%. Given Ingredion’s higher probable upside, research analysts plainly believe Ingredion is more favorable than Central Garden & Pet.

Dividends

Ingredion pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. Central Garden & Pet does not pay a dividend. Ingredion pays out 30.1% of its earnings in the form of a dividend. Ingredion has increased its dividend for 4 consecutive years.

Summary

Ingredion beats Central Garden & Pet on 12 of the 17 factors compared between the two stocks.

Ingredion Company Profile

Ingredion Incorporated is an ingredients solutions provider. The Company manufactures and sells sweetener, starches, nutrition ingredients and biomaterial solutions derived from the wet milling and processing of corn and other starch-based materials to a range of industries, both domestically and internationally. It operates through four segments: North America, South America, Asia Pacific, and Europe, Middle East and Africa (EMEA). It turns corn, tapioca, potatoes, and other vegetables and fruits into ingredients and biomaterials for the food, beverage, paper and corrugating, brewing and other industries. Its product line includes animal feed products and edible corn oil. Its sweetener products include glucose syrups, high maltose syrup, high fructose corn syrup (HFCS), caramel color, dextrose, polyols, maltodextrins and glucose and syrup solids. Its starch-based products include both food-grade and industrial starches, and biomaterials. It also offers specialty ingredients.

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.

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