ECOLAB INC (ECL) Stock Fundamental Analysis
NYSE:ECL - New York Stock Exchange, Inc. - US2788651006 - Common Stock - Currency: USD
Overall ECL gets a fundamental rating of 6 out of 10. We evaluated ECL against 85 industry peers in the Chemicals industry. ECL has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ECL is valied quite expensively at the moment, while it does show a decent growth rate. These ratings would make ECL suitable for quality investing!
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.
ECL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.44%, ECL belongs to the top of the industry, outperforming 92.94% of the companies in the same industry.
Looking at the Return On Equity, with a value of 24.12%, ECL belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.07%, ECL belongs to the top of the industry, outperforming 90.59% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ECL is above the industry average of 7.11%.
The 3 year average ROIC (10.09%) for ECL is below the current ROIC(12.07%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.44% | ||
| ROE | 24.12% | ||
| ROIC | 12.07% |
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 has a Profit Margin of 13.42%. This is amongst the best in the industry. ECL outperforms 94.12% of its industry peers.
In the last couple of years the Profit Margin of ECL has grown nicely.
ECL has a better Operating Margin (16.64%) than 87.06% of its industry peers.
ECL's Operating Margin has improved in the last couple of years.
The Gross Margin of ECL (43.50%) is better than 89.41% of its industry peers.
ECL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.64% | ||
| PM (TTM) | 13.42% | ||
| GM | 43.5% |
OM growth 3Y5.67%
OM growth 5Y2.23%
PM growth 3Y14.78%
PM growth 5Y5.11%
GM growth 3Y2.05%
GM growth 5Y0.87%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ECL is still creating some value.
ECL has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ECL has been reduced compared to 5 years ago.
ECL has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.06 indicates that ECL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.06, ECL belongs to the top of the industry, outperforming 95.29% of the companies in the same industry.
The Debt to FCF ratio of ECL is 4.16, which is a neutral value as it means it would take ECL, 4.16 years of fcf income to pay off all of its debts.
ECL's Debt to FCF ratio of 4.16 is amongst the best of the industry. ECL outperforms 81.18% of its industry peers.
A Debt/Equity ratio of 0.79 indicates that ECL is somewhat dependend on debt financing.
The Debt to Equity ratio of ECL (0.79) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 4.16 | ||
| Altman-Z | 5.06 |
ROIC/WACC1.42
WACC8.48%
2.3 Liquidity
A Current Ratio of 1.26 indicates that ECL should not have too much problems paying its short term obligations.
The Current ratio of ECL (1.26) is worse than 76.47% of its industry peers.
ECL has a Quick Ratio of 1.26. This is a bad value and indicates that ECL is not financially healthy enough and could expect problems in meeting its short term obligations.
ECL has a Quick ratio (0.95) which is in line with its industry peers.
ECL does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
ECL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.28%, which is quite impressive.
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.
The Revenue has been growing slightly by 2.75% in the past year.
ECL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.10% yearly.
EPS 1Y (TTM)20.28%
EPS 3Y11.38%
EPS 5Y2.73%
EPS Q2Q%11.94%
Revenue 1Y (TTM)2.75%
Revenue growth 3Y7.33%
Revenue growth 5Y1.1%
Sales Q2Q%-1.52%
3.2 Future
ECL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.68% yearly.
The Revenue is expected to grow by 4.69% on average over the next years.
EPS Next Y13.8%
EPS Next 2Y13.06%
EPS Next 3Y13.94%
EPS Next 5Y10.68%
Revenue Next Year1.45%
Revenue Next 2Y3.26%
Revenue Next 3Y4.1%
Revenue Next 5Y4.69%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ECL is valuated quite expensively with a Price/Earnings ratio of 37.45.
ECL's Price/Earnings ratio is a bit more expensive when compared to the industry. ECL is more expensive than 63.53% of the companies in the same industry.
ECL's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.18.
Based on the Price/Forward Earnings ratio of 30.00, the valuation of ECL can be described as expensive.
63.53% of the companies in the same industry are cheaper than ECL, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.81, ECL is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.45 | ||
| Fwd PE | 30 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ECL is valued a bit more expensive than 71.76% of the companies in the same industry.
ECL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.81 | ||
| EV/EBITDA | 22.15 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ECL may justify a higher PE ratio.
A more expensive valuation may be justified as ECL's earnings are expected to grow with 13.94% in the coming years.
PEG (NY)2.71
PEG (5Y)13.7
EPS Next 2Y13.06%
EPS Next 3Y13.94%
5. Dividend
5.1 Amount
ECL has a Yearly Dividend Yield of 1.03%.
ECL's Dividend Yield is comparable with the industry average which is at 3.80.
Compared to an average S&P500 Dividend Yield of 2.45, ECL's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
5.2 History
The dividend of ECL has a limited annual growth rate of 3.93%.
ECL has paid a dividend for at least 10 years, which is a reliable track record.
ECL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.93%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
ECL pays out 31.45% 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.
DP31.45%
EPS Next 2Y13.06%
EPS Next 3Y13.94%
255.38
+2.76 (+1.09%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners81.39%
Inst Owner Change0.86%
Ins Owners0.11%
Ins Owner Change1.57%
Market Cap72.43B
Analysts74.84
Price Target282.64 (10.67%)
Short Float %1.08%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
Yearly Dividend2.34
Dividend Growth(5Y)3.93%
DP31.45%
Div Incr Years33
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.14%
Min EPS beat(2)-0.66%
Max EPS beat(2)0.38%
EPS beat(4)1
Avg EPS beat(4)-0.36%
Min EPS beat(4)-0.66%
Max EPS beat(4)0.38%
EPS beat(8)4
Avg EPS beat(8)0.1%
EPS beat(12)5
Avg EPS beat(12)-0.18%
EPS beat(16)8
Avg EPS beat(16)0.8%
Revenue beat(2)0
Avg Revenue beat(2)-1.21%
Min Revenue beat(2)-1.93%
Max Revenue beat(2)-0.49%
Revenue beat(4)0
Avg Revenue beat(4)-1.34%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)-0.49%
Revenue beat(8)1
Avg Revenue beat(8)-0.98%
Revenue beat(12)3
Avg Revenue beat(12)-0.66%
Revenue beat(16)6
Avg Revenue beat(16)-0.43%
PT rev (1m)-3.99%
PT rev (3m)0.68%
EPS NQ rev (1m)-0.53%
EPS NQ rev (3m)1.1%
EPS NY rev (1m)-0.29%
EPS NY rev (3m)1.37%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-2.69%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-2.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.45 | ||
| Fwd PE | 30 | ||
| P/S | 4.6 | ||
| P/FCF | 39.81 | ||
| P/OCF | 25.74 | ||
| P/B | 8.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.15 |
EPS(TTM)6.82
EY2.67%
EPS(NY)8.51
Fwd EY3.33%
FCF(TTM)6.41
FCFY2.51%
OCF(TTM)9.92
OCFY3.88%
SpS55.5
BVpS30.88
TBVpS-8.67
PEG (NY)2.71
PEG (5Y)13.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.44% | ||
| ROE | 24.12% | ||
| ROCE | 14.88% | ||
| ROIC | 12.07% | ||
| ROICexc | 13% | ||
| ROICexgc | 41.45% | ||
| OM | 16.64% | ||
| PM (TTM) | 13.42% | ||
| GM | 43.5% | ||
| FCFM | 11.56% |
ROA(3y)6.93%
ROA(5y)3.9%
ROE(3y)18.76%
ROE(5y)10.47%
ROIC(3y)10.09%
ROIC(5y)9.38%
ROICexc(3y)10.68%
ROICexc(5y)9.93%
ROICexgc(3y)35.11%
ROICexgc(5y)31.71%
ROCE(3y)12.44%
ROCE(5y)11.62%
ROICexcg growth 3Y15.5%
ROICexcg growth 5Y7.38%
ROICexc growth 3Y16.48%
ROICexc growth 5Y4.33%
OM growth 3Y5.67%
OM growth 5Y2.23%
PM growth 3Y14.78%
PM growth 5Y5.11%
GM growth 3Y2.05%
GM growth 5Y0.87%
F-Score8
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 4.16 | ||
| Debt/EBITDA | 1.96 | ||
| Cap/Depr | 106.32% | ||
| Cap/Sales | 6.32% | ||
| Interest Coverage | 7.64 | ||
| Cash Conversion | 79.17% | ||
| Profit Quality | 86.13% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 5.06 |
F-Score8
WACC8.48%
ROIC/WACC1.42
Cap/Depr(3y)88.71%
Cap/Depr(5y)80.52%
Cap/Sales(3y)5.47%
Cap/Sales(5y)5.12%
Profit Quality(3y)101.32%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)20.28%
EPS 3Y11.38%
EPS 5Y2.73%
EPS Q2Q%11.94%
EPS Next Y13.8%
EPS Next 2Y13.06%
EPS Next 3Y13.94%
EPS Next 5Y10.68%
Revenue 1Y (TTM)2.75%
Revenue growth 3Y7.33%
Revenue growth 5Y1.1%
Sales Q2Q%-1.52%
Revenue Next Year1.45%
Revenue Next 2Y3.26%
Revenue Next 3Y4.1%
Revenue Next 5Y4.69%
EBIT growth 1Y23.15%
EBIT growth 3Y13.42%
EBIT growth 5Y3.35%
EBIT Next Year46.59%
EBIT Next 3Y20.76%
EBIT Next 5Y16.11%
FCF growth 1Y11.14%
FCF growth 3Y8.64%
FCF growth 5Y2.35%
OCF growth 1Y16.67%
OCF growth 3Y10.92%
OCF growth 5Y3.06%