Ecolab (NYSE:ECL) vs. Albemarle (NYSE:ALB) Head-To-Head Analysis

Ecolab (NYSE:ECL) and Albemarle (NYSE:ALB) are both large-cap materials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 0.9%. Albemarle pays an annual dividend of $1.64 per share and has a dividend yield of 1.8%. Ecolab pays out 39.7% of its earnings in the form of a dividend. Albemarle pays out 39.6% 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 33 consecutive years and Albemarle has increased its dividend for 30 consecutive years. Albemarle is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Ecolab has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Earnings & Valuation

This table compares Ecolab and Albemarle”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$16.08 billion	5.39	$2.08 billion	$7.35	42.04
Albemarle	$5.14 billion	2.15	-$510.63 million	$4.14	22.61

Ecolab has higher revenue and earnings than Albemarle. Albemarle is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ecolab and Albemarle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ecolab	11.99%	22.57%	8.23%
Albemarle	10.40%	14.91%	7.58%

Analyst Ratings

This is a breakdown of current ratings for Ecolab and Albemarle, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	2	19	1	2.95
Albemarle	0	9	15	0	2.62

Ecolab currently has a consensus price target of $332.00, suggesting a potential upside of 7.44%. Albemarle has a consensus price target of $152.63, suggesting a potential upside of 63.03%. Given Albemarle’s higher probable upside, analysts clearly believe Albemarle is more favorable than Ecolab.

Insider & Institutional Ownership

74.9% of Ecolab shares are owned by institutional investors. Comparatively, 92.9% of Albemarle shares are owned by institutional investors. 0.5% of Ecolab shares are owned by company insiders. Comparatively, 0.4% of Albemarle shares are owned by company 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.

Summary

Ecolab beats Albemarle on 13 of the 18 factors compared between the two stocks.

About Ecolab

Ecolab Inc. provides water, hygiene, cleaning and infection-prevention products and services to businesses and institutions. Its solutions help customers manage water use, maintain sanitary environments and support operational efficiency. The company serves a range of industries, including food and beverage, foodservice, hospitality, healthcare, life sciences and manufacturing. Its offerings include cleaning and sanitizing products, water-treatment programs, pest-elimination services, and related monitoring and consulting support.

About Albemarle

Albemarle Corporation is a specialty chemicals company that produces lithium, bromine and refining catalysts. Its products serve industries including energy storage, transportation, electronics, petroleum refining and pharmaceuticals. The company supplies lithium compounds used in rechargeable batteries and other applications. It also makes bromine-based products for uses such as flame retardants and water treatment, along with catalysts used in refining petroleum. Albemarle traces its history to 1887 and is headquartered in Charlotte, North Carolina.