Critical Contrast: Colgate-Palmolive (NYSE:CL) versus Oil-Dri Corporation Of America (NYSE:ODC)

Oil-Dri Corporation Of America (NYSE:ODC) and Colgate-Palmolive (NYSE:CL) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Dividends

Oil-Dri Corporation Of America pays an annual dividend of $0.82 per share and has a dividend yield of 0.8%. Colgate-Palmolive pays an annual dividend of $2.12 per share and has a dividend yield of 2.4%. Oil-Dri Corporation Of America pays out 21.1% of its earnings in the form of a dividend. Colgate-Palmolive pays out 84.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Oil-Dri Corporation Of America has increased its dividend for 11 consecutive years and Colgate-Palmolive has increased its dividend for 63 consecutive years. Colgate-Palmolive is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

49.0% of Oil-Dri Corporation Of America shares are owned by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are owned by institutional investors. 11.7% of Oil-Dri Corporation Of America shares are owned by company insiders. Comparatively, 0.4% of Colgate-Palmolive shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Oil-Dri Corporation Of America has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Earnings and Valuation

This table compares Oil-Dri Corporation Of America and Colgate-Palmolive”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	$485.57 million	2.95	$54.00 million	$3.89	25.39
Colgate-Palmolive	$21.05 billion	3.42	$2.13 billion	$2.52	35.66

Colgate-Palmolive 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 Colgate-Palmolive, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Oil-Dri Corporation Of America	11.35%	20.53%	14.17%
Colgate-Palmolive	9.68%	464.63%	18.34%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Oil-Dri Corporation Of America and Colgate-Palmolive, 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
Colgate-Palmolive	0	7	12	0	2.63

Colgate-Palmolive has a consensus target price of $99.00, suggesting a potential upside of 10.17%. Given Colgate-Palmolive’s higher possible upside, analysts clearly believe Colgate-Palmolive is more favorable than Oil-Dri Corporation Of America.

Summary

Colgate-Palmolive beats Oil-Dri Corporation Of America on 11 of the 17 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 Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.