Head-To-Head Comparison: Methanex (NASDAQ:MEOH) versus Ecolab (NYSE:ECL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ecolab	12.57%	22.72%	8.71%
Methanex	2.07%	11.35%	4.34%

Earnings and Valuation

This table compares Ecolab and Methanex”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$16.84 billion	4.76	$2.08 billion	$7.45	38.24
Methanex	$3.59 billion	1.15	$79.88 million	$1.03	51.72

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

Risk and Volatility

Ecolab has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Methanex has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Dividends

Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.4%. Ecolab pays out 39.2% of its earnings in the form of a dividend. Methanex pays out 71.8% 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 Methanex has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Ecolab and Methanex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	1	3	17	1	2.82
Methanex	0	5	6	0	2.55

Ecolab presently has a consensus target price of $327.56, indicating a potential upside of 14.99%. Methanex has a consensus target price of $68.56, indicating a potential upside of 28.69%. Given Methanex’s higher probable upside, analysts clearly believe Methanex is more favorable than Ecolab.

Insider and Institutional Ownership

74.9% of Ecolab shares are owned by institutional investors. Comparatively, 73.5% of Methanex shares are owned by institutional investors. 0.5% of Ecolab shares are owned by insiders. Comparatively, 1.0% of Methanex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Ecolab beats Methanex on 14 of the 18 factors compared between the two stocks.

About Ecolab

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.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.