Dolby Laboratories (NYSE:DLB) and Central Garden & Pet (NASDAQ:CENT) are both mid-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Institutional and Insider Ownership
58.6% of Dolby Laboratories shares are owned by institutional investors. Comparatively, 17.7% of Central Garden & Pet shares are owned by institutional investors. 37.3% of Dolby Laboratories shares are owned by company insiders. Comparatively, 10.8% of Central Garden & Pet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Dolby Laboratories and Central Garden & Pet's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Dolby Laboratories | 19.91% | 9.89% | 8.13% |
Central Garden & Pet | 4.48% | 12.03% | 5.54% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for Dolby Laboratories and Central Garden & Pet, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Dolby Laboratories | 0 | 2 | 2 | 0 | 2.50 |
Central Garden & Pet | 0 | 1 | 2 | 0 | 2.67 |
Dolby Laboratories presently has a consensus target price of $75.6667, indicating a potential downside of 20.00%. Central Garden & Pet has a consensus target price of $36.00, indicating a potential downside of 17.86%. Given Central Garden & Pet's stronger consensus rating and higher possible upside, analysts plainly believe Central Garden & Pet is more favorable than Dolby Laboratories.
Volatility and Risk
Dolby Laboratories has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Central Garden & Pet has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.
Earnings & Valuation
This table compares Dolby Laboratories and Central Garden & Pet's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Dolby Laboratories | $1.16 billion | 8.17 | $231.36 million | $2.30 | 41.12 |
Central Garden & Pet | $2.70 billion | 0.89 | $120.68 million | $2.26 | 19.39 |
Dolby Laboratories has higher earnings, but lower revenue than Central Garden & Pet. Central Garden & Pet is trading at a lower price-to-earnings ratio than Dolby Laboratories, indicating that it is currently the more affordable of the two stocks.
Summary
Dolby Laboratories beats Central Garden & Pet on 9 of the 13 factors compared between the two stocks.