Head-To-Head Review: Spectrum Brands (NYSE:SPB) versus Central Garden & Pet (NASDAQ:CENTA)

Spectrum Brands (NYSE:SPB) 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 dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spectrum Brands	4.47%	8.23%	4.53%
Central Garden & Pet	5.42%	11.55%	5.04%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Spectrum Brands and Central Garden & Pet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectrum Brands	0	3	3	0	2.50
Central Garden & Pet	1	1	2	2	2.83

Spectrum Brands currently has a consensus price target of $86.00, indicating a potential upside of 3.42%. Central Garden & Pet has a consensus price target of $45.00, indicating a potential upside of 19.33%. Given Central Garden & Pet’s stronger consensus rating and higher possible upside, analysts plainly believe Central Garden & Pet is more favorable than Spectrum Brands.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectrum Brands	$2.81 billion	0.69	$99.70 million	$5.24	15.87
Central Garden & Pet	$3.13 billion	0.75	$162.84 million	$2.75	13.71

Central Garden & Pet has higher revenue and earnings than Spectrum Brands. Central Garden & Pet is trading at a lower price-to-earnings ratio than Spectrum Brands, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

50.8% of Central Garden & Pet shares are owned by institutional investors. 3.9% of Spectrum 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, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Spectrum Brands has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Summary

Central Garden & Pet beats Spectrum Brands on 11 of the 15 factors compared between the two stocks.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.

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.