| It's always informative to compare a company's numbers today to some earlier period and fortunately I have that information. It was laid out very clearly in an article I wrote on Ecolab Inc. earlier this year on 11 May. Ecolab is a specialty chemical company disguised as a cleaning company. The company develops products and services for hospitals, hotels and water treatment facilities everywhere in the world. It's also recently introduced anti-microbial fruit and vegetable treatments for the food industry and waste water treatments for the oil and gas extraction industry. |  |
| 10 May 2014 Price $104.75 1yr Target $117.94 Analysts 16 1yr Cap Gain 12.59% Dividend $1.10 Yield 1.05% 1yr Tot Return 13.64% 3yr DGR 14.31% 5yr DGR 12.61% Payout Ratio 30.37% Beta 0.64 EPS (ttm) $3.25 EPS next yr $4.82 P/E 32.23 PEG 2.28 ROE 14.30% | 16 November 2014 Price $112.41 1yr Target $122.64 Analysts 14 1yr Cap Gain 9.10% Dividend $1.10 Yield 0.97% 1yr Tot Return 10.07% 3yr DGR 14.31% 5yr DGR 12.61% Payout Ratio 29.17% Beta 0.64 EPS (ttm) $3.77 EPS next yr $4.78 P/E 29.82 PEG 2.03 ROE 15.60% |
The Company
Ecolab Inc. (ECL) develops and markets programs, products, and services for hospitality, foodservice, healthcare, industrial, and energy markets worldwide. It operates through four segments: Global Industrial, Global Institutional, Global Energy, and Other. The company offers cleaners and sanitizers for washing dishes, glassware, flatware, foodservice utensils, kitchen equipment, laundries, and general housekeeping functions; food safety products and equipment, water filters, dishwasher racks, and related kitchen sundries; pool and spa treatment programs; janitorial cleaning and floor care products; chemical dispensing device systems; and dishwashing machines, detergents, and rinse additives. It also provides lubricants, animal health products, cleaning systems, electronic dispensers, chemical injectors, and antimicrobial products; clean-in-place process control and facility cleaning systems; hard surface cleaners, degreasers, polishes, hand care products, and assorted cleaning tools and equipment; and infection prevention and other healthcare related products. In addition, the company offers textile care products and services; pest elimination services to detect, eliminate, and prevent pests; food service equipment repair and maintenance services; products and programs for water treatment and process applications, including cooling water and boiler water applications, raw water/potable water preparation, and wastewater applications. Further, it provides paper services for the papermaking process and across various grades of paper; and energy solutions, including well stimulation and completion, oilfield, enhanced oil recovery, downstream refining, downstream chemical processing, and water treatment solutions. The company sells its products through field sales personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in St. Paul, Minnesota. (Daily Chart) (Weekly Chart)
The strongest segment of Ecolab's businesses is the Global Energy segment where sales grew 78% last year. Acquisition-adjusted Global Energy sales, however, rose 12%. The Company's upstream energy business saw further double-digit growth in the fourth quarter, resulting from strong international performances in onshore, deepwater and oil sands.
Global Food & Beverage Sales are increasing at a rate of 9% and is led by the beverage and brewing, dairy, and agribusiness segments. Global Food & Beverage continues to benefit from its total plant assurance approach to customers in which they combine industry-leading Cleaning & Sanitizing, water treatment and pest elimination capabilities to deliver improved food safety, lower operating costs and better product quality assurance for their customers.
Global Water sales are increasing at a rate of 5%. Gains in this sector were led by good growth in the heavy, light and mining businesses.
Global Paper sales continue to increase at the rate of 5% per year and are expected to show modest sales growth going forward as the penetration of new business and technology more than offset the challenging paper market conditions.
Global Institutional sales are increasing at the rate of 4% but the end markets remain tough as modest growth in global lodging demand remains a challenge for the food service industry across both North America and Europe.
Comparing Then and Now.
Ecolab Inc. (ECL) develops and markets programs, products, and services for hospitality, foodservice, healthcare, industrial, and energy markets worldwide. It operates through four segments: Global Industrial, Global Institutional, Global Energy, and Other. The company offers cleaners and sanitizers for washing dishes, glassware, flatware, foodservice utensils, kitchen equipment, laundries, and general housekeeping functions; food safety products and equipment, water filters, dishwasher racks, and related kitchen sundries; pool and spa treatment programs; janitorial cleaning and floor care products; chemical dispensing device systems; and dishwashing machines, detergents, and rinse additives. It also provides lubricants, animal health products, cleaning systems, electronic dispensers, chemical injectors, and antimicrobial products; clean-in-place process control and facility cleaning systems; hard surface cleaners, degreasers, polishes, hand care products, and assorted cleaning tools and equipment; and infection prevention and other healthcare related products. In addition, the company offers textile care products and services; pest elimination services to detect, eliminate, and prevent pests; food service equipment repair and maintenance services; products and programs for water treatment and process applications, including cooling water and boiler water applications, raw water/potable water preparation, and wastewater applications. Further, it provides paper services for the papermaking process and across various grades of paper; and energy solutions, including well stimulation and completion, oilfield, enhanced oil recovery, downstream refining, downstream chemical processing, and water treatment solutions. The company sells its products through field sales personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in St. Paul, Minnesota. (Daily Chart) (Weekly Chart)
The strongest segment of Ecolab's businesses is the Global Energy segment where sales grew 78% last year. Acquisition-adjusted Global Energy sales, however, rose 12%. The Company's upstream energy business saw further double-digit growth in the fourth quarter, resulting from strong international performances in onshore, deepwater and oil sands.
Global Food & Beverage Sales are increasing at a rate of 9% and is led by the beverage and brewing, dairy, and agribusiness segments. Global Food & Beverage continues to benefit from its total plant assurance approach to customers in which they combine industry-leading Cleaning & Sanitizing, water treatment and pest elimination capabilities to deliver improved food safety, lower operating costs and better product quality assurance for their customers.
Global Water sales are increasing at a rate of 5%. Gains in this sector were led by good growth in the heavy, light and mining businesses.
Global Paper sales continue to increase at the rate of 5% per year and are expected to show modest sales growth going forward as the penetration of new business and technology more than offset the challenging paper market conditions.
Global Institutional sales are increasing at the rate of 4% but the end markets remain tough as modest growth in global lodging demand remains a challenge for the food service industry across both North America and Europe.
Comparing Then and Now.
Since 10 May the stock price has moved up from $104.75 to $112.41 today for an increase of 7.31% in six months. During that period the company also paid two dividends for a total of $0.55 or a yield of 0.52% making the total ROIC of 7.83%. From here it looks like the typical investor is estimated to receive another 10% over the next year.
In addition I would expect this company, based on its history, to announce this month or next month an increase in their dividend for next year to near $1.25 per share. This would be a very nice increase and welcome news to all those dividend growth investors.
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