Financial Comparison: Ecolab (NYSE:ECL) & American Vanguard (NYSE:AVD)

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

Analyst Recommendations

This is a summary of recent recommendations for Ecolab and American Vanguard, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	4	16	1	2.86
American Vanguard	1	0	1	0	2.00

Ecolab presently has a consensus price target of $322.53, indicating a potential upside of 30.31%. American Vanguard has a consensus price target of $12.00, indicating a potential upside of 335.10%. Given American Vanguard’s higher probable upside, analysts plainly believe American Vanguard is more favorable than Ecolab.

Earnings and Valuation

This table compares Ecolab and American Vanguard”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$16.08 billion	4.33	$2.08 billion	$7.39	33.49
American Vanguard	$515.11 million	0.15	-$49.88 million	($1.59)	-1.73

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

Institutional & Insider Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 79.0% of American Vanguard shares are held by institutional investors. 0.5% of Ecolab shares are held by insiders. Comparatively, 7.6% of American Vanguard shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ecolab	12.80%	22.64%	9.05%
American Vanguard	-8.71%	-4.13%	-1.34%

Risk and Volatility

Ecolab has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, American Vanguard has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Summary

Ecolab beats American Vanguard on 11 of the 15 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 American Vanguard

American Vanguard Corporation, through its subsidiaries, develops, manufactures, and markets specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally. It manufactures and formulates chemicals, including insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, growth regulators, soil fumigants, and biorationals in liquid, powder, and granular forms for crops, turf and ornamental plants, and human and animal health protection. The company also markets, sells, and distributes end-use chemical and biological products for crop applications; and distributes chemicals for turf and ornamental markets. It distributes its products through national distribution companies, and buying groups or co-operatives; and through sales offices, sales force executives, sales agents, and wholly owned distributors. American Vanguard Corporation was incorporated in 1969 and is headquartered in Newport Beach, California.