Critical Review: WD-40 (NASDAQ:WDFC) & Oil-Dri Corporation Of America (NYSE:ODC)

Oil-Dri Corporation Of America (NYSE:ODC) and WD-40 (NASDAQ:WDFC) are both consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Risk & Volatility

Oil-Dri Corporation Of America has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, WD-40 has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Oil-Dri Corporation Of America and WD-40, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oil-Dri Corporation Of America	0	0	1	0	3.00
WD-40	0	3	2	1	2.67

WD-40 has a consensus target price of $305.00, indicating a potential upside of 38.25%. Given WD-40’s higher possible upside, analysts plainly believe WD-40 is more favorable than Oil-Dri Corporation Of America.

Earnings & Valuation

This table compares Oil-Dri Corporation Of America and WD-40″s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oil-Dri Corporation Of America	$493.84 million	2.09	$56.97 million	$4.00	17.81
WD-40	$687.99 million	4.29	$82.35 million	$6.08	36.28

WD-40 has higher revenue and earnings than Oil-Dri Corporation Of America. Oil-Dri Corporation Of America is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.

Dividends

Oil-Dri Corporation Of America pays an annual dividend of $0.90 per share and has a dividend yield of 1.3%. WD-40 pays an annual dividend of $4.08 per share and has a dividend yield of 1.8%. Oil-Dri Corporation Of America pays out 22.5% of its earnings in the form of a dividend. WD-40 pays out 67.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Oil-Dri Corporation Of America has raised its dividend for 11 consecutive years and WD-40 has raised its dividend for 17 consecutive years. WD-40 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

49.0% of Oil-Dri Corporation Of America shares are held by institutional investors. Comparatively, 91.5% of WD-40 shares are held by institutional investors. 11.7% of Oil-Dri Corporation Of America shares are held by insiders. Comparatively, 0.8% of WD-40 shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Oil-Dri Corporation Of America and WD-40’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oil-Dri Corporation Of America	11.54%	20.31%	14.19%
WD-40	11.97%	30.84%	17.36%

Summary

WD-40 beats Oil-Dri Corporation Of America on 14 of the 18 factors compared between the two stocks.

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.

About WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.