NEW YORK, Nov 16 (Reuters) - Oil-Dri Corp of America , a maker of cat litter and other absorbent products used in factories and garages, is unlikely to see use of its products slip, and its track record of steady profit growth is poised to continue, business weekly Barron's said.
'Even in a recession, it's hard to imagine Americans allowing the smell of cat pee to waft through their homes,' the publication said in its Nov. 17 edition.
That is not the only good news for Oil-Dri Corp. Natural gas, which the company needs to dry clay, has been nearly halved since July, and the company has moved to lock in lower prices in the spot market, Barron's said.
With profits having increased at an annual rate of 15 percent over the past five years, the company has outperformed the market, a fact that investors may have missed with the stock trading at 13.5 times 2008 earnings, below the 17 times fetched by household product stocks, according to Barron's.
Another factor standing in Oil-Dri's favor is, as the leading maker of private-label cat litter, it does business with customers such as Wal-Mart Stores, which are expected to see more business from consumers switching to generic store brands as recession squeezes wallets, said Barron's.
(Reporting by Lilla Zuill; Editing by Tim Dobbyn) Keywords: OILDRICORP/SHARES (lilla.zuill@thomsonreuters.com;+1 646 223 6281) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'Even in a recession, it's hard to imagine Americans allowing the smell of cat pee to waft through their homes,' the publication said in its Nov. 17 edition.
That is not the only good news for Oil-Dri Corp. Natural gas, which the company needs to dry clay, has been nearly halved since July, and the company has moved to lock in lower prices in the spot market, Barron's said.
With profits having increased at an annual rate of 15 percent over the past five years, the company has outperformed the market, a fact that investors may have missed with the stock trading at 13.5 times 2008 earnings, below the 17 times fetched by household product stocks, according to Barron's.
Another factor standing in Oil-Dri's favor is, as the leading maker of private-label cat litter, it does business with customers such as Wal-Mart Stores, which are expected to see more business from consumers switching to generic store brands as recession squeezes wallets, said Barron's.
(Reporting by Lilla Zuill; Editing by Tim Dobbyn) Keywords: OILDRICORP/SHARES (lilla.zuill@thomsonreuters.com;+1 646 223 6281) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.