ECOLAB INC (ECL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ECL - US2788651006 - Common Stock
283.67 USD
+1.77 (+0.63%)
283.67 USD
0 (0%)
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. While ECL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ECL is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- ECL had positive earnings in the past year.
- ECL had a positive operating cash flow in the past year.
- Of the past 5 years ECL 4 years were profitable.
- 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 has a Return On Equity of 20.42%. This is amongst the best in the industry. ECL outperforms 91.57% of its industry peers.
- ECL's Return On Invested Capital of 11.53% is amongst the best of the industry. ECL outperforms 87.95% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ECL is above the industry average of 6.11%.
- The last Return On Invested Capital (11.53%) for ECL is above the 3 year average (10.09%), which is a sign of increasing profitability.
| 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.
- ECL's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 17.63%, ECL belongs to the top of the industry, outperforming 84.34% of the companies in the same industry.
- In the last couple of years the Operating Margin of ECL has grown nicely.
- Looking at the Gross Margin, with a value of 44.36%, ECL belongs to the top of the industry, outperforming 87.95% of the companies in the same industry.
- 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%
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
- ECL has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for ECL has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 5.33 indicates that ECL is not in any danger for bankruptcy at the moment.
- With an excellent Altman-Z score value of 5.33, 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.
- Looking at the Debt to Equity ratio, with a value of 0.83, ECL is in line with its industry, outperforming 40.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 5.19 | ||
| Altman-Z | 5.33 |
ROIC/WACC0.78
WACC14.74%
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.
- A Quick Ratio of 1.33 indicates that ECL should not have too much problems paying its short term obligations.
- ECL has a Quick ratio (1.33) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.33 |
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%.
- Measured over the past years, ECL shows a small growth in Revenue. The Revenue has been growing by 1.10% on average per year.
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
- The Earnings Per Share is expected to grow by 11.49% on average over the next years. This is quite good.
- ECL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.42% yearly.
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
- 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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- ECL is valuated quite expensively with a Price/Earnings ratio of 39.02.
- Based on the Price/Earnings ratio, ECL is valued a bit more expensive than 61.45% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, ECL is valued a bit more expensive.
- With a Price/Forward Earnings ratio of 33.22, ECL can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ECL indicates a slightly more expensive valuation: ECL is more expensive than 62.65% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. ECL is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.02 | ||
| Fwd PE | 33.22 |
4.2 Price Multiples
- 79.52% of the companies in the same industry are cheaper than ECL, based on the Enterprise Value to EBITDA ratio.
- 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 | 51.73 | ||
| EV/EBITDA | 23.01 |
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.
- 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 13.34% in the coming years.
PEG (NY)2.75
PEG (5Y)14.28
EPS Next 2Y13.23%
EPS Next 3Y13.34%
5. Dividend
5.1 Amount
- ECL has a Yearly Dividend Yield of 1.04%.
- ECL's Dividend Yield is comparable with the industry average which is at 2.23.
- With a Dividend Yield of 1.04, ECL pays less dividend than the S&P500 average, which is at 1.82.
| 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%
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 39.02 and the Price/Book (PB) ratio is 8.27.
How financially healthy is ECOLAB INC?
The financial health rating of ECOLAB INC (ECL) is 6 / 10.