Comparing Central Garden & Pet (NASDAQ:CENT) & Darling Ingredients (DAR)

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

Valuation & Earnings

This table compares Central Garden & Pet and Darling Ingredients’ 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
Darling Ingredients	$3.52 billion	0.73	$428.51 million	$0.51	30.59

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

Institutional & Insider Ownership

20.9% of Central Garden & Pet shares are owned by institutional investors. Comparatively, 94.5% of Darling Ingredients shares are owned by institutional investors. 11.6% of Central Garden & Pet shares are owned by insiders. Comparatively, 2.0% of Darling Ingredients shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Central Garden & Pet and Darling Ingredients, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Central Garden & Pet	0	1	3	0	2.75
Darling Ingredients	0	0	5	0	3.00

Central Garden & Pet presently has a consensus target price of $38.33, suggesting a potential upside of 11.89%. Darling Ingredients has a consensus target price of $18.60, suggesting a potential upside of 19.23%. Given Darling Ingredients’ stronger consensus rating and higher probable upside, analysts plainly believe Darling Ingredients is more favorable than Central Garden & Pet.

Profitability

This table compares Central Garden & Pet and Darling Ingredients’ 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%
Darling Ingredients	2.39%	3.99%	1.77%

Volatility and Risk

Central Garden & Pet has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Summary

Darling Ingredients beats Central Garden & Pet on 8 of the 14 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.

Darling Ingredients Company Profile

Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.