Reviewing Oil-Dri Corporation Of America (NYSE:ODC) & Kronos Worldwide (NYSE:KRO)

Kronos Worldwide (NYSE:KRO) and Oil-Dri Corporation Of America (NYSE:ODC) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Dividends

Kronos Worldwide pays an annual dividend of $0.20 per share and has a dividend yield of 4.5%. Oil-Dri Corporation Of America pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Kronos Worldwide pays out -55.6% of its earnings in the form of a dividend. Oil-Dri Corporation Of America pays out 19.5% 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 increased its dividend for 11 consecutive years. Kronos Worldwide is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Kronos Worldwide and Oil-Dri Corporation Of America”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kronos Worldwide	$1.86 billion	0.27	$86.20 million	($0.36)	-12.32
Oil-Dri Corporation Of America	$485.57 million	1.67	$54.00 million	$3.70	14.94

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kronos Worldwide and Oil-Dri Corporation Of America, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kronos Worldwide	3	1	0	0	1.25
Oil-Dri Corporation Of America	0	0	1	0	3.00

Kronos Worldwide presently has a consensus price target of $6.50, indicating a potential upside of 46.53%. Given Kronos Worldwide’s higher possible upside, research analysts plainly believe Kronos Worldwide is more favorable than Oil-Dri Corporation Of America.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kronos Worldwide	3.57%	8.04%	3.50%
Oil-Dri Corporation Of America	11.12%	22.36%	14.74%

Institutional and Insider Ownership

15.1% of Kronos Worldwide shares are held by institutional investors. Comparatively, 49.0% of Oil-Dri Corporation Of America shares are held by institutional investors. 0.1% of Kronos Worldwide shares are held by company insiders. Comparatively, 11.7% of Oil-Dri Corporation Of America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Kronos Worldwide has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Oil-Dri Corporation Of America has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Summary

Oil-Dri Corporation Of America beats Kronos Worldwide on 11 of the 17 factors compared between the two stocks.

About Kronos Worldwide

Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) in Europe, North America, the Asia Pacific, and internationally. The company produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for various products, including paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, foods, and cosmetics. It also produces ilmenite, a raw material used directly as a feedstock by sulfate-process TiO2 plants; iron-based chemicals, which are used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement, and agricultural products; specialty chemicals for use in the formulation of pearlescent pigments, and production of electroceramic capacitors for cell phones and other electronic devices, as well as for use in natural gas pipe, and other specialty applications. In addition, the company provides technical services for its products. It sells its products under the KRONOS brand through agents and distributors to paint, plastics, decorative laminate, and paper manufacturers. The company was founded in 1916 and is headquartered in Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.

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.