Ecolab (ECL) and Its Peers Financial Review

Ecolab (NYSE:ECL) is one of 296 public companies in the “Chemicals” industry, but how does it contrast to its peers? We will compare Ecolab to related businesses based on the strength of its risk, earnings, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Volatility and Risk

Ecolab has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Ecolab’s peers have a beta of 0.94, suggesting that their average share price is 6% less volatile than the S&P 500.

Institutional & Insider Ownership

74.9% of Ecolab shares are owned by institutional investors. Comparatively, 47.4% of shares of all “Chemicals” companies are owned by institutional investors. 0.5% of Ecolab shares are owned by insiders. Comparatively, 13.7% of shares of all “Chemicals” companies 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.

Profitability

This table compares Ecolab and its peers’ 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	-54.14%	-0.61%	-1.37%

Dividends

Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 0.9%. 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 103.9% of their earnings in the form of a dividend. Ecolab has increased its dividend for 33 consecutive years.

Earnings and Valuation

This table compares Ecolab and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ecolab	$16.08 billion	$2.08 billion	42.01
Ecolab Competitors	$6.34 billion	$229.42 million	19.54

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	2	19	1	2.95
Ecolab Competitors	3272	12241	14151	521	2.39

Ecolab presently has a consensus target price of $332.00, suggesting a potential upside of 7.53%. As a group, “Chemicals” companies have a potential upside of 7.90%. Given Ecolab’s peers higher probable upside, analysts plainly believe Ecolab has less favorable growth aspects than its peers.

Summary

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

Ecolab Company Profile

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.