Critical Contrast: Oil-Dri Corporation Of America (NYSE:ODC) versus Central Garden & Pet (NASDAQ:CENTA)

Central Garden & Pet (NASDAQ:CENTA) and Oil-Dri Corporation Of America (NYSE:ODC) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Central Garden & Pet and Oil-Dri Corporation Of America, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Garden & Pet	1	1	3	1	2.67
Oil-Dri Corporation Of America	0	0	1	0	3.00

Central Garden & Pet presently has a consensus price target of $46.67, suggesting a potential upside of 28.88%. Given Central Garden & Pet’s higher probable upside, research analysts clearly believe Central Garden & Pet is more favorable than Oil-Dri Corporation Of America.

Valuation and Earnings

This table compares Central Garden & Pet and Oil-Dri Corporation Of America”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Central Garden & Pet	$3.13 billion	0.72	$162.84 million	$2.68	13.51
Oil-Dri Corporation Of America	$493.84 million	2.21	$56.97 million	$4.00	18.82

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

Profitability

This table compares Central Garden & Pet and Oil-Dri Corporation Of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Central Garden & Pet	5.39%	11.13%	4.93%
Oil-Dri Corporation Of America	11.54%	20.31%	14.19%

Volatility and Risk

Central Garden & Pet has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Oil-Dri Corporation Of America has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

50.8% of Central Garden & Pet shares are held by institutional investors. Comparatively, 49.0% of Oil-Dri Corporation Of America shares are held by institutional investors. 20.3% of Central Garden & Pet shares are held by insiders. Comparatively, 11.7% of Oil-Dri Corporation Of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Oil-Dri Corporation Of America beats Central Garden & Pet on 8 of the 15 factors compared between the two stocks.

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.

About Oil-Dri Corporation Of America

Oil-Dri Corporation of America is a manufacturer and supplier of specialty sorbent products for the pet care, animal health and nutrition, fluids purification, agricultural ingredients, sports field, industrial and automotive markets. It operates through the Business to Business Products Group and Retail and Wholesale Products Group segments. The Business to Business Products Group segment’s customers include processors and refiners of edible oils, jet fuel and biofuel, manufacturers of animal feed and agricultural chemicals, distributors of animal health and nutrition products, and marketers of consumer products. The Retail and Wholesale Products Group segment customers include retailers of cat litter and related accessories such as mass merchandisers, drugstore chains, pet specialty retail outlets, dollar stores, retail grocery stores as well as distributors of industrial cleanup and automotive products, environmental service companies, and sports field product users. The company was founded by Nick Jaffee in 1941 and is headquartered in Chicago, IL.