Central Garden & Pet Co

CENT

Wholesale-Miscellaneous Nondurable Goods

Mkt Cap

$2.967B

PE

20.00

Debt

$1.19B

Cash

$315.5M

EV

$3.841B

FCF

$341.2M

Market Cap

$2.967B

P/E Ratio

20.00

Debt

$1.19B

Cash

$315.5M

EV

$3.841B

FCF

$341.2M

Charts data: {"Earnings":[{"time":"2014-09-26","value":8804000},{"time":"2015-09-25","value":31971000},{"time":"2016-09-23","value":44514000},{"time":"2017-09-29","value":78828000},{"time":"2018-09-28","value":123594000},{"time":"2019-09-27","value":92647000},{"time":"2020-09-25","value":120676000},{"time":"2021-09-24","value":151746000},{"time":"2022-09-23","value":152152000},{"time":"2023-09-29","value":125643000}],"Sales":[{"time":"2014-09-26","value":1604357000},{"time":"2015-09-25","value":1650737000},{"time":"2016-09-23","value":1829017000},{"time":"2017-09-29","value":2054478000},{"time":"2018-09-28","value":2215362000},{"time":"2019-09-27","value":2383010000},{"time":"2020-09-25","value":2695509000},{"time":"2021-09-24","value":3303684000},{"time":"2022-09-23","value":3338588000},{"time":"2023-09-29","value":3310083000}],"Net Margins":[{"time":"2014-09-26","value":0.0054875566971690215},{"time":"2015-09-25","value":0.019367712724679947},{"time":"2016-09-23","value":0.024337663345939377},{"time":"2017-09-29","value":0.038368870340787294},{"time":"2018-09-28","value":0.05578952785143015},{"time":"2019-09-27","value":0.03887814151010697},{"time":"2020-09-25","value":0.04476928105229847},{"time":"2021-09-24","value":0.04593235914815098},{"time":"2022-09-23","value":0.04557375752863187},{"time":"2023-09-29","value":0.0379576584635491}],"Assets":[{"time":"2014-09-26","value":1148727000},{"time":"2015-09-25","value":1134754000},{"time":"2016-09-23","value":1212193000},{"time":"2017-09-29","value":1306906000},{"time":"2018-09-28","value":1907209000},{"time":"2019-09-27","value":2025020000},{"time":"2020-09-25","value":2339364000},{"time":"2021-09-24","value":3116680000},{"time":"2022-09-23","value":3282002000},{"time":"2023-09-29","value":3378648000}],"Stockholders Equity":[{"time":"2014-09-26","value":486453000},{"time":"2015-09-25","value":506380000},{"time":"2016-09-23","value":554587000},{"time":"2017-09-29","value":637142000},{"time":"2018-09-28","value":952834000},{"time":"2019-09-27","value":996177000},{"time":"2020-09-25","value":1077674000},{"time":"2021-09-24","value":1223541000},{"time":"2022-09-23","value":1334712000},{"time":"2023-09-29","value":1452813000}],"ROE":[{"time":"2014-09-26","value":0.01809835688134311},{"time":"2015-09-25","value":0.06313637979383072},{"time":"2016-09-23","value":0.08026513423502535},{"time":"2017-09-29","value":0.1237212426743175},{"time":"2018-09-28","value":0.12971199600350114},{"time":"2019-09-27","value":0.09300254874384772},{"time":"2020-09-25","value":0.11197820491168943},{"time":"2021-09-24","value":0.1240219984454955},{"time":"2022-09-23","value":0.11399612800364423},{"time":"2023-09-29","value":0.08648256864441604}],"ROA":[{"time":"2014-09-26","value":0.04936769136618187},{"time":"2015-09-25","value":0.08070207287218199},{"time":"2016-09-23","value":0.10671402986158145},{"time":"2017-09-29","value":0.11945159024443992},{"time":"2018-09-28","value":0.08773867992443408},{"time":"2019-09-27","value":0.07993254387610986},{"time":"2020-09-25","value":0.08462855716339997},{"time":"2021-09-24","value":0.08165612125723526},{"time":"2022-09-23","value":0.07923090845160972},{"time":"2023-09-29","value":0.06234624027125643}]}

Central Garden & Pet Company produces and distributes various products for the lawn and garden, and pet supplies markets in the United States. It operates through two segments, Pet and Garden. The Pet segment provides dog and cat supplies, such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, and pet containment; supplies for aquatics, small animals, reptiles, and pet birds, including toys, cages and habitats, bedding, and food and supplements; animal and household health and insect control products; live fish and products for fish, reptiles, and other aquarium-based pets, such as aquariums, furniture and lighting fixtures, pumps, filters, water conditioners, food, and supplements; and products for equine and livestock, as well as outdoor cushions. This segment sells its products under the Aqueon, Cadet, Comfort Zone, Farnam, Four Paws, Kaytee, K&H Pet Products, Nylabone, and Zilla brands. The Garden segment offers lawn and garden supplies products that include grass seed; vegetable; flower and herb packet seed; wild bird feed, bird feeders, bird houses, and other birding accessories; fertilizers; decorative outdoor lifestyle products; live plants; and weed and grass, as well as other herbicides, insecticide, and pesticide products. This segment sells its lawn and garden supplies products under the AMDRO, Ferry-Morse, IMAGE, and Sevin brands, as well as under Bell Nursery, Lilly Miller, and Over-N-Out other brand names. Central Garden & Pet Company was founded in 1955 and is based in Walnut Creek, California.

Sector

10-K
9/30/23
10-Q
6/24/23
10-Q
3/25/23
10-Q
12/24/22
10-K
9/24/22
10-Q
6/25/22
10-Q
3/26/22
10-Q
12/25/21
10-K
9/25/21
10-Q
6/26/21
10-Q
3/27/21
10-Q
12/26/20
10-K
9/26/20
10-Q
6/27/20
10-Q
3/28/20
10-Q
12/28/19
10-K
9/28/19
10-Q
6/29/19
10-Q
3/30/19
10-Q
12/29/18
10-K
9/29/18
10-Q
6/30/18
10-Q
3/31/18
10-Q
12/30/17

DCF

Discounted Cash Flow Valuation of Central Garden & Pet Co

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$341.2M	$400.4M	$464.5M	$532.4M	$602.9M	$674.5M	$745.3M	$813.3M	$876.3M	$932.1M	$978.7M	$9.787B
DCF		$348.2M	$351.2M	$350.1M	$344.7M	$335.3M	$322.2M	$305.7M	$286.5M	$265M	$241.9M	$2.419B
Value	$5.57B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 18%

Earnings Stability 72%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	09-2015	09-2016	09-2017	09-2018	09-2019	09-2020	09-2021	09-2022	09-2023	TTM
Net Margin	1.9%	2.4%	3.8%	5.6%	3.9%	4.5%	4.6%	4.6%	3.8%	4.5%
ROA	8.1%	11%	12%	8.8%	8%	8.5%	8.2%	7.9%	6.2%	6.6%
ROE	6.3%	8%	12%	13%	9.3%	11%	12%	11%	8.6%	9.8%

What is the average Net Margin?

The average Net Margin over the past 5 years is +4.48%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.19%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +7.93%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.38%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +10.99%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.4%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	09-2015	09-2016	09-2017	09-2018	09-2019	09-2020	09-2021	09-2022	09-2023	TTM
Debt FCF	6.12	3.20	5.69	9.08	4.00	3.14	6.96	-7.95	3.63	3.49
Debt Equity	0.79	0.71	0.62	0.73	0.70	0.64	0.97	0.89	0.82	0.79
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	89%	89%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 3.49.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -1.69.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.89.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	09-2016	09-2018	09-2020	09-2022	Trend
Revenue	8.8%	8.4%	7.1%	-0.85%	-0.31%
Net Income	16%	0.33%	1.4%	-17%	-23%
Stockholders Equity	15%	8.8%	10%	8.8%	-0.44%
FCF	15%	34%	14%	-	3.6%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +8.36%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.31%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +0.33%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -22.81%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +8.8%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.44%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +33.85%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +3.55%.