Taking everything into account, ECL scores 6 out of 10 in our fundamental rating. ECL was compared to 83 industry peers in the Chemicals industry. ECL scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, ECL is valued expensive at the moment.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ECL was profitable.
ECL had a positive operating cash flow in the past year.
ECL had positive earnings in 4 of the past 5 years.
In the past 5 years ECL always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of ECL (8.30%) is better than 87.95% of its industry peers.
ECL's Return On Equity of 20.42% is amongst the best of the industry. ECL outperforms 91.57% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.53%, ECL belongs to the top of the industry, outperforming 87.95% of the companies in the same industry.
ECL had an Average Return On Invested Capital over the past 3 years of 10.09%. This is above the industry average of 6.11%.
The 3 year average ROIC (10.09%) for ECL is below the current ROIC(11.53%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	8.3%
ROE	20.42%
ROIC	11.53%

ROA(3y)6.93%

ROA(5y)3.9%

ROE(3y)18.76%

ROE(5y)10.47%

ROIC(3y)10.09%

ROIC(5y)9.38%

1.3 Margins

ECL's Profit Margin of 12.49% is amongst the best of the industry. ECL outperforms 91.57% of its industry peers.
In the last couple of years the Profit Margin of ECL has grown nicely.
The Operating Margin of ECL (17.63%) is better than 84.34% of its industry peers.
In the last couple of years the Operating Margin of ECL has grown nicely.
The Gross Margin of ECL (44.36%) is better than 87.95% of its industry peers.
In the last couple of years the Gross Margin of ECL has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	17.63%
PM (TTM)	12.49%
GM	44.36%

OM growth 3Y5.67%

OM growth 5Y2.23%

PM growth 3Y14.78%

PM growth 5Y5.11%

GM growth 3Y2.05%

GM growth 5Y0.87%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ECL is destroying value.
Compared to 1 year ago, ECL has less shares outstanding
Compared to 5 years ago, ECL has less shares outstanding
The debt/assets ratio for ECL has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 5.30 indicates that ECL is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.30, ECL belongs to the best of the industry, outperforming 96.39% of the companies in the same industry.
The Debt to FCF ratio of ECL is 5.19, which is a neutral value as it means it would take ECL, 5.19 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ECL (5.19) is better than 78.31% of its industry peers.
ECL has a Debt/Equity ratio of 0.83. This is a neutral value indicating ECL is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.83, ECL perfoms like the industry average, outperforming 40.96% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.83
Debt/FCF	5.19
Altman-Z	5.3

ROIC/WACC0.78

WACC14.73%

2.3 Liquidity

ECL has a Current Ratio of 1.70. This is a normal value and indicates that ECL is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.70, ECL is doing worse than 61.45% of the companies in the same industry.
ECL has a Quick Ratio of 1.33. This is a normal value and indicates that ECL is financially healthy and should not expect problems in meeting its short term obligations.
ECL's Quick ratio of 1.33 is in line compared to the rest of the industry. ECL outperforms 51.81% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.7
Quick Ratio	1.33

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ECL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.59%, which is quite good.
Measured over the past 5 years, ECL shows a small growth in Earnings Per Share. The EPS has been growing by 2.73% on average per year.
ECL shows a small growth in Revenue. In the last year, the Revenue has grown by 1.38%.
ECL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.10% yearly.

EPS 1Y (TTM)13.59%

EPS 3Y11.38%

EPS 5Y2.73%

EPS Q2Q%13.11%

Revenue 1Y (TTM)1.38%

Revenue growth 3Y7.33%

Revenue growth 5Y1.1%

Sales Q2Q%4.16%

3.2 Future

Based on estimates for the next years, ECL will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.49% on average per year.
The Revenue is expected to grow by 5.42% on average over the next years.

EPS Next Y14.17%

EPS Next 2Y13.23%

EPS Next 3Y13.34%

EPS Next 5Y11.49%

Revenue Next Year1.99%

Revenue Next 2Y4.08%

Revenue Next 3Y4.32%

Revenue Next 5Y5.42%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 38.72, the valuation of ECL can be described as expensive.
Based on the Price/Earnings ratio, ECL is valued a bit more expensive than 61.45% of the companies in the same industry.
ECL is valuated rather expensively when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
ECL is valuated quite expensively with a Price/Forward Earnings ratio of 32.96.
Based on the Price/Forward Earnings ratio, ECL is valued a bit more expensive than 62.65% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ECL to the average of the S&P500 Index (25.83), we can say ECL is valued slightly more expensively.

		Industry Rank	Sector Rank
PE	38.72
Fwd PE	32.96

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ECL is valued a bit more expensive than 79.52% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ECL is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	51.32
EV/EBITDA	22.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ECL does not grow enough to justify the current Price/Earnings ratio.
ECL has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ECL's earnings are expected to grow with 13.34% in the coming years.

PEG (NY)2.73

PEG (5Y)14.17

EPS Next 2Y13.23%

EPS Next 3Y13.34%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.04%, ECL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.23, ECL has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 1.82, ECL's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	1.04%

5.2 History

The dividend of ECL has a limited annual growth rate of 3.93%.
ECL has been paying a dividend for at least 10 years, so it has a reliable track record.
ECL has not decreased their dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)3.93%

Div Incr Years34

Div Non Decr Years34

5.3 Sustainability

ECL pays out 36.57% of its income as dividend. This is a sustainable payout ratio.
ECL's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP36.57%

EPS Next 2Y13.23%

EPS Next 3Y13.34%

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ECOLAB INC / ECL FAQ

Can you provide the ChartMill fundamental rating for ECOLAB INC?

ChartMill assigns a fundamental rating of 6 / 10 to ECL.

What is the valuation status of ECOLAB INC (ECL) stock?

ChartMill assigns a valuation rating of 2 / 10 to ECOLAB INC (ECL). This can be considered as Overvalued.

How profitable is ECOLAB INC (ECL) stock?

ECOLAB INC (ECL) has a profitability rating of 9 / 10.

Can you provide the PE and PB ratios for ECL stock?

The Price/Earnings (PE) ratio for ECOLAB INC (ECL) is 38.72 and the Price/Book (PB) ratio is 8.2.

How financially healthy is ECOLAB INC?

The financial health rating of ECOLAB INC (ECL) is 6 / 10.