Buy Or Fear Oil-Dri Of America Stock

Forbes

a day ago

Oil-Dri of America (NYSE:ODC) stock appears appealing – making it a wise choice for purchase at its present price of approximately $55. We have identified some minor issues with ODC stock, which makes it enticing given that its current valuation seems low.
Our conclusion is drawn from comparing the current valuation of ODC stock to its operational performance in recent years, as well as its current and historical financial state. Our analysis of Oil-Dri of America across key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience indicates that the company exhibits a robust operating performance and financial status, as clarified below. However, for those investors who prefer lower volatility than individual stocks, the Trefis High Quality Portfolio offers an alternative – having outperformed the S&P 500 and yielded returns surpassing 91% since its inception.
In terms of what you pay for each dollar of sales or profit, ODC stock appears somewhat inexpensive when compared to the wider market.
• Oil-Dri of America has a price-to-sales (P/S) ratio of 1.5 compared to a figure of 3.0 for the S&P 500
• Additionally, the company's price-to-free cash flow (P/FCF) ratio stands at 9.5 in contrast to 20.5 for the S&P 500
• Furthermore, it holds a price-to-earnings (P/E) ratio of 15.5 compared to the benchmark's 26.4
Oil-Dri of America's Revenues have experienced significant growth in recent years.
• Oil-Dri of America has witnessed its top line increase at an average rate of 12.9% over the past 3 years (versus an increase of 5.5% for the S&P 500)
• Its revenues have risen 8.2% from $430 million to $465 million in the last 12 months (compared to growth of 5.5% for the S&P 500)
• Additionally, its quarterly revenues increased 10.6% to $117 million in the latest quarter from $106 million a year prior (versus a 4.8% rise for the S&P 500)
Oil-Dri of America's profit margins are less favorable than those of most companies in the Trefis coverage universe.
• Oil-Dri of America's Operating Income over the previous four quarters totaled $62 million, reflecting a moderate Operating Margin of 13.3% (versus 13.2% for the S&P 500)
• Oil-Dri of America's Operating Cash Flow (OCF) during this period was $75 million, indicating a moderate OCF Margin of 16.1% (compared to 14.9% for the S&P 500)
• For the last four-quarter period, Oil-Dri of America's Net Income was $46 million – suggesting a poor Net Income Margin of 9.8% (relative to 11.6% for the S&P 500)
Oil-Dri of America's balance sheet appears solid.
• Oil-Dri of America's Debt was reported at $58 million at the conclusion of the most recent quarter, with its market capitalization standing at $762 million (as of 6/6/2025). This creates a strong Debt-to-Equity Ratio of 8.3% (in contrast to 19.9% for the S&P 500). [Note: A low Debt-to-Equity Ratio is preferable]
• Cash (along with cash equivalents) comprises $23 million of the $354 million in Total Assets for Oil-Dri of America. This leads to a moderate Cash-to-Assets Ratio of 6.4% (compared to 13.8% for the S&P 500)
ODC stock has experienced a slightly better impact than the benchmark S&P 500 index during certain recent downturns. While investors remain optimistic about a soft landing for the U.S. economy, what might the consequences be if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes.
• ODC stock dropped 41.5% from a peak of $19.23 on 11 March 2021 to $11.24 on 11 October 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock completely recovered to its pre-Crisis peak by 9 March 2023
• Since then, the stock has risen to a high of $54.82 on 8 June 2025
• ODC stock decreased 24.6% from a high of $19.19 on 16 January 2020 to $14.46 on 16 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 March 2021
• ODC stock declined 49.4% from a high of $11.47 on 10 December 2007 to $5.81 on 10 October 2008, in contrast to a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 17 June 2010
In conclusion, Oil-Dri of America's performance across the parameters outlined above is as follows:
• Growth: Very Strong
• Profitability: Weak
• Financial Stability: Strong
• Downturn Resilience: Neutral
• Overall: Neutral
When considered alongside its low valuation, this renders the stock appealing, supporting our assessment that ODC represents a wise stock to purchase.
Although ODC stock appears promising, investing in a single stock bears its risks. Conversely, the Trefis High Quality (HQ) Portfolio, which consists of 30 stocks, has a proven track record of comfortably outperforming the S&P 500 over the past 4 years. What accounts for this? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; providing a smoother experience as demonstrated in HQ Portfolio performance metrics.