Unilever (NYSE: UN) and Ecolab (NYSE:ECL) are both large-cap consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
Volatility and Risk
Unilever has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Ecolab has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
This table compares Unilever and Ecolab’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Unilever pays an annual dividend of $1.51 per share and has a dividend yield of 2.6%. Ecolab pays an annual dividend of $1.64 per share and has a dividend yield of 1.1%. Unilever pays out 59.7% of its earnings in the form of a dividend. Ecolab pays out 35.0% 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. Ecolab has increased its dividend for 32 consecutive years.
This is a breakdown of recent recommendations for Unilever and Ecolab, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ecolab has a consensus target price of $140.65, suggesting a potential downside of 6.14%. Given Ecolab’s stronger consensus rating and higher probable upside, analysts plainly believe Ecolab is more favorable than Unilever.
Institutional & Insider Ownership
8.3% of Unilever shares are held by institutional investors. Comparatively, 78.3% of Ecolab shares are held by institutional investors. 1.5% of Ecolab shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Unilever and Ecolab’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Unilever||$60.68 billion||1.62||$6.84 billion||$2.53||22.59|
|Ecolab||$13.84 billion||3.13||$1.51 billion||$4.69||31.95|
Unilever has higher revenue and earnings than Ecolab. Unilever is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.
Ecolab beats Unilever on 14 of the 17 factors compared between the two stocks.
Unilever N.V. operates in the fast-moving consumer goods industry worldwide. The company operates through Personal Care, Home Care, Foods, and Refreshment segments. The Personal Care segment offers skincare and haircare products, deodorants, and oral care products. This segment markets its products under the Axe, Dove, Lux, Rexona, Sunsilk, TRESemmé, Signal, Lifebuoy, Vaseline, Dermalogica, Murad, Dollar Shave Club, Zest & Camay, and Seventh Generation brands. The Home Care segment provides home care products, such as powders, liquids and capsules, soap bars, and various cleaning products under the Dirt is Good, Surf, Comfort, Domestos, Sunlight, Cif, Pureit, Blueair, and Radiant brands. The Foods segment provides soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines, and spreads under the Knorr, Hellmann's, Bango, Maizena, Robertsons, and Kissan brands. The Refreshment segment offers ice cream and tea-based beverages under the Heartbrand, Magnum, Lipton, Brooke Bond, Ben & Jerry's, Pure Leaf, Taj Mahal, Grom, Talenti, and Breyers brands. The company was formerly known as Margarine Unie N.V. and changed its name to Unilever N.V. in 1929. Unilever N.V. was founded in 1927 and is headquartered in Rotterdam, the Netherlands. Unilever N.V. is a subsidiary of The Unilever Group.
Ecolab Inc. provides water, hygiene and energy technologies and services. The Company’s cleaning and sanitizing programs and products, pest elimination services and equipment maintenance and repair services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors in over 170 countries. Its segments include Global Industrial, Global Institutional, Global Energy, Other and Corporate. Its Global Industrial segment consists of the Water, Food and Beverage, Paper and Textile Care operating units. Its Global Institutional segment consists of the Institutional, Specialty and Healthcare operating units. The Global Energy segment provides on-site and technology-driven solutions to the global drilling, oil and gas production, refining, and petrochemical industries. The Company’s Other segment consists of the Pest Elimination operating units.
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