NEW YORK ( TheStreet) -- Oil-Dri Corporation of America (NYSE: ODC) has been upgraded by TheStreet Ratings from hold to buy. 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. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. 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 -11.16%.
- 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.
- The gross profit margin for OIL DRI CORP AMERICA is currently lower than what is desirable, coming in at 27.80%. Regardless of ODC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ODC's net profit margin of 1.80% is significantly lower than the same period one year prior.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Household Products industry and the overall market, OIL DRI CORP AMERICA's return on equity is significantly below that of the industry average and is below that of the S&P 500.