Financial Analysis: Ecolab (ECL) & Its Rivals

Ecolab (NYSE:ECL) is one of 295 public companies in the “Chemicals” industry, but how does it weigh in compared to its competitors? We will compare Ecolab to related companies based on the strength of its dividends, earnings, valuation, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Ecolab and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ecolab	11.99%	22.57%	8.23%
Ecolab Competitors	-59.66%	0.26%	-1.43%

Analyst Recommendations

This is a summary of current ratings and target prices for Ecolab and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	3	18	1	2.91
Ecolab Competitors	3245	12202	14121	516	2.40

Ecolab presently has a consensus target price of $328.58, suggesting a potential upside of 7.37%. As a group, “Chemicals” companies have a potential upside of 8.69%. Given Ecolab’s competitors higher possible upside, analysts clearly believe Ecolab has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Ecolab and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ecolab	$17.37 billion	$2.08 billion	41.64
Ecolab Competitors	$8.01 billion	$222.31 million	-1.24

Ecolab has higher revenue and earnings than its competitors. Ecolab is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Ecolab pays out 39.7% of its earnings in the form of a dividend. As a group, “Chemicals” companies pay a dividend yield of 3.1% and pay out 105.9% of their earnings in the form of a dividend. Ecolab has increased its dividend for 33 consecutive years.

Volatility & Risk

Ecolab has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Ecolab’s competitors have a beta of 0.93, indicating that their average share price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 47.5% of shares of all “Chemicals” companies are held by institutional investors. 0.5% of Ecolab shares are held by company insiders. Comparatively, 13.9% of shares of all “Chemicals” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Ecolab beats its competitors on 11 of the 15 factors compared.

Ecolab Company Profile

Ecolab Inc. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through three segments: Global Industrial; Global Institutional & Specialty; and Global Healthcare & Life Sciences. The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries. Its Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries. The Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names. In addition, the company provides pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, hotels, grocery operations, and other commercial segments including education, life sciences, and healthcare customers. Further, it offers colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management. It sells its products through field sales and corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in Saint Paul, Minnesota.