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Ecolab Inc ECL

Morningstar Rating
$225.90 +0.39 (0.17%)
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Company Report

Ecolab Earnings: Price Increases Drive Profit Growth and Margin Expansion

Ecolab reported strong fourth-quarter results as higher prices and lower costs drove a 48% year-on-year operating profit growth with over 400 basis points of operating margin expansion to 15%. The results exemplify our near-term thesis that the company would drive full profit recovery following the pandemic and subsequent cost inflation. First, we thought Ecolab's strong price power, which underpins our wide moat rating, would drive full profit recovery following cost inflation. Prices were up 5% year over year during the quarter as the company raised prices as contracts allowed. Second, we thought Ecolab's sales would hold up well even in an economic slowdown. Volumes were up 1% versus the prior-year quarter. We view this as a sign that customer demand for Ecolab's products, which are an essential part of operations, remains solid.

Price vs Fair Value

ECL is trading at a 8% premium.
Price
$225.90
Fair Value
$645.00
Uncertainty
Medium
1-Star Price
$889.40
5-Star Price
$336.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Ecolab's focus on delivering savings on labor, energy, and water for customers makes the firm's products and services attractive even during economic slowdowns.

Bears

Sales growth could become more difficult, as Ecolab already sells to many of the largest restaurant and hotel chains.

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News

Trading Information

Previous Close Price
$225.51
Day Range
$224.67227.27
52-Week Range
$153.87227.27
Bid/Ask
$224.89 / $225.99
Market Cap
$64.50 Bil
Volume/Avg
898,385 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
43.36
Price/Sales
4.22
Dividend Yield (Trailing)
0.96%
Dividend Yield (Forward)
1.01%
Total Yield
0.98%

Company Profile

Ecolab produces and markets cleaning and sanitation products for the industrial manufacturing, hospitality, healthcare, and life sciences markets. The firm is the global market share leader in this category with a wide array of products and services, including dish and laundry washing systems, pest control, and infection control products. Additionally, Ecolab sells customized water management solutions across its end markets. The company has a strong hold on the U.S. market and is growing its presence abroad.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Large Growth
Total Number of Employees
48,000

Competitors

Valuation

Metric
ECL
XYL
DD
Price/Earnings (Normalized)
43.3634.7420.01
Price/Book Value
8.023.041.23
Price/Sales
4.223.792.60
Price/Cash Flow
28.7826.6213.39
Price/Earnings
ECL
XYL
DD

Financial Strength

Metric
ECL
XYL
DD
Quick Ratio
0.911.201.54
Current Ratio
1.301.762.43
Interest Coverage
5.8813.391.88
Quick Ratio
ECL
XYL
DD

Profitability

Metric
ECL
XYL
DD
Return on Assets (Normalized)
6.92%6.44%3.90%
Return on Equity (Normalized)
19.65%11.13%6.14%
Return on Invested Capital (Normalized)
10.39%8.73%5.18%
Return on Assets
ECL
XYL
DD
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