NEW YORK ( TheStreet) -- Oil-Dri Corporation of America (NYSE: ODC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 181.25% to $0.38 million when compared to the same quarter last year. In addition, OIL DRI CORP AMERICA has also vastly surpassed the industry average cash flow growth rate of -11.17%.
- Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ODC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.21 is high and demonstrates strong liquidity.
- OIL DRI CORP AMERICA has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, OIL DRI CORP AMERICA reported lower earnings of $1.26 versus $1.29 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Products industry. The net income has significantly decreased by 57.3% when compared to the same quarter one year ago, falling from $2.52 million to $1.08 million.