Critical Contrast: Oil-Dri Corporation Of America (NYSE:ODC) and Methanex (NASDAQ:MEOH)

Methanex (NASDAQ:MEOH) and Oil-Dri Corporation Of America (NYSE:ODC) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methanex	0	3	8	2	2.92
Oil-Dri Corporation Of America	0	0	1	0	3.00

Methanex presently has a consensus target price of $46.27, indicating a potential upside of 23.66%. Given Methanex’s higher possible upside, research analysts plainly believe Methanex is more favorable than Oil-Dri Corporation Of America.

Dividends

Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 2.0%. Oil-Dri Corporation Of America pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Methanex pays out 25.1% 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. Methanex has increased its dividend for 4 consecutive years and Oil-Dri Corporation Of America has increased its dividend for 11 consecutive years.

Insider & Institutional Ownership

73.5% of Methanex shares are held by institutional investors. Comparatively, 49.0% of Oil-Dri Corporation Of America shares are held by institutional investors. 1.0% of Methanex shares are held by insiders. Comparatively, 11.7% of Oil-Dri Corporation Of America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Methanex has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Oil-Dri Corporation Of America has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Methanex	5.97%	9.30%	3.47%
Oil-Dri Corporation Of America	11.12%	22.36%	14.74%

Earnings & Valuation

This table compares Methanex and Oil-Dri Corporation Of America”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methanex	$3.57 billion	0.81	$163.99 million	$2.95	12.68
Oil-Dri Corporation Of America	$485.57 million	1.69	$54.00 million	$3.70	15.14

Methanex has higher revenue and earnings than Oil-Dri Corporation Of America. Methanex 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.

Summary

Oil-Dri Corporation Of America beats Methanex on 10 of the 18 factors compared between the two stocks.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.

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.