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Does Oil-Dri Corporation of America's (NYSE:ODC) Past Performance Indicate A Stronger Future?

Simply Wall St

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Measuring Oil-Dri Corporation of America's (NYSE:ODC) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess ODC's recent performance announced on 31 January 2019 and weigh these figures against its long-term trend and industry movements.

Check out our latest analysis for Oil-Dri of America

How ODC fared against its long-term earnings performance and its industry

ODC's trailing twelve-month earnings (from 31 January 2019) of US$9.2m has jumped 45% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -5.7%, indicating the rate at which ODC is growing has accelerated. How has it been able to do this? Let's see whether it is merely due to an industry uplift, or if Oil-Dri of America has experienced some company-specific growth.

NYSE:ODC Income Statement, May 3rd 2019

In terms of returns from investment, Oil-Dri of America has fallen short of achieving a 20% return on equity (ROE), recording 7.1% instead. Furthermore, its return on assets (ROA) of 4.9% is below the US Household Products industry of 8.7%, indicating Oil-Dri of America's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Oil-Dri of America’s debt level, has declined over the past 3 years from 13% to 6.0%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be factors that are impacting the industry as a whole, thus the high industry growth rate over the same period of time. I recommend you continue to research Oil-Dri of America to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for ODC’s future growth? Take a look at our free research report of analyst consensus for ODC’s outlook.
  2. Financial Health: Are ODC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 January 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.