Ecolab (NYSE: ECL) and W.R. Grace & Co. (NYSE:GRA) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitabiliy.
Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. W.R. Grace & Co. pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Ecolab pays out 34.9% of its earnings in the form of a dividend. W.R. Grace & Co. pays out 44.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ecolab has raised its dividend for 31 consecutive years.
This is a summary of recent recommendations for Ecolab and W.R. Grace & Co., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|W.R. Grace & Co.||0||3||6||0||2.67|
Ecolab currently has a consensus price target of $129.31, indicating a potential downside of 3.70%. W.R. Grace & Co. has a consensus price target of $79.89, indicating a potential upside of 13.27%. Given W.R. Grace & Co.’s stronger consensus rating and higher probable upside, analysts clearly believe W.R. Grace & Co. is more favorable than Ecolab.
Insider & Institutional Ownership
76.1% of Ecolab shares are owned by institutional investors. Comparatively, 84.1% of W.R. Grace & Co. shares are owned by institutional investors. 1.5% of Ecolab shares are owned by insiders. Comparatively, 1.3% of W.R. Grace & Co. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Ecolab and W.R. Grace & Co.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|W.R. Grace & Co.||8.08%||40.62%||6.03%|
Risk and Volatility
Ecolab has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, W.R. Grace & Co. has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ecolab and W.R. Grace & Co.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ecolab||$13.22 billion||2.95||$2.88 billion||$4.24||31.67|
|W.R. Grace & Co.||$1.63 billion||2.96||$384.00 million||$1.90||37.12|
Ecolab has higher revenue and earnings than W.R. Grace & Co.. Ecolab is trading at a lower price-to-earnings ratio than W.R. Grace & Co., indicating that it is currently the more affordable of the two stocks.
Ecolab beats W.R. Grace & Co. on 10 of the 17 factors compared between the two stocks.
Ecolab Inc. provides water, hygiene and energy technologies and services. The Company’s cleaning and sanitizing programs and products, pest elimination services and equipment maintenance and repair services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors in over 170 countries. Its segments include Global Industrial, Global Institutional, Global Energy, Other and Corporate. Its Global Industrial segment consists of the Water, Food and Beverage, Paper and Textile Care operating units. Its Global Institutional segment consists of the Institutional, Specialty and Healthcare operating units. The Global Energy segment provides on-site and technology-driven solutions to the global drilling, oil and gas production, refining, and petrochemical industries. The Company’s Other segment consists of the Pest Elimination and Equipment Care operating units.
About W.R. Grace & Co.
W. R. Grace & Co. (Grace) is engaged in the production and sale of specialty chemicals and specialty materials. The Company operates in two segments: Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. The Grace Materials Technologies segment includes specialty materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. It Grace Catalysts Technologies segment produces and sells catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications, including Fluid catalytic cracking catalysts (FCC), Hydroprocessing catalysts (HPC), and Polyolefin catalysts and catalyst supports.
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Source: Google Alert- Chemical Manufacturing