Neo Performance Materials (OTCMKTS:NOPMF) & Ecolab (NYSE:ECL) Critical Analysis

Neo Performance Materials (OTCMKTS:NOPMF) and Ecolab (NYSE:ECL) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Dividends

Neo Performance Materials pays an annual dividend of $0.29 per share and has a dividend yield of 1.6%. Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 0.9%. Neo Performance Materials pays out -2,900.0% of its earnings in the form of a dividend. Ecolab pays out 39.7% 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 raised its dividend for 33 consecutive years. Neo Performance Materials is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

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

Valuation and Earnings

This table compares Neo Performance Materials and Ecolab”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neo Performance Materials	$478.79 million	1.78	-$9.98 million	($0.01)	-1,859.00
Ecolab	$16.08 billion	5.36	$2.08 billion	$7.35	41.84

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Neo Performance Materials and Ecolab, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neo Performance Materials	0	1	2	1	3.00
Ecolab	0	3	18	1	2.91

Ecolab has a consensus target price of $328.58, suggesting a potential upside of 6.85%. Given Ecolab’s higher possible upside, analysts clearly believe Ecolab is more favorable than Neo Performance Materials.

Profitability

This table compares Neo Performance Materials and Ecolab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neo Performance Materials	1.43%	13.10%	7.17%
Ecolab	11.99%	22.57%	8.23%

Summary

Ecolab beats Neo Performance Materials on 12 of the 16 factors compared between the two stocks.

About Neo Performance Materials

Neo Performance Materials is a Canadian advanced materials company that produces specialized materials used in applications including electric motors, consumer electronics, automotive systems, and industrial equipment. Its business focuses on materials derived from rare earths and other specialty metals. The company operates through three main businesses. Magnequench makes magnetic powders and bonded magnets used in compact, high-performance motors and other devices. Chemicals and Oxides produces rare earth materials, including separated oxides and related products, while Rare Metals supplies specialty metals and compounds for industrial and technology applications.

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.