This specialty chemical company is forecasted to grow at an annual rate of 13.2% over the next five years.
Ecolab Inc. (ECL)
From Directinvesting.com
Founded in 1923 and headquartered in St. Paul, Minnesota, Ecolab Inc. (ECL) is a diversified company that provides water, hygiene, energy technologies and services, for the hospitality, healthcare, and industrial markets worldwide. The company operates through Global Industrial, Global Institutional, Global Energy, and other segments, and sells its products through field sales and corporate account personnel, distributors, and dealers. Its current total market capitalization of $55.2 billion makes ECL a large capitalization stock (a large-cap stock has a market capitalization value of more than $10 billion) with a long history of consistent earnings growth and dividend payments. It is considered a solid and well-diversified business with a wide economic moat and sustainable competitive advantage over its rivals the company and enjoys outstanding management and corporate culture.
Consensus estimates call for the company to earn about $5.86 per share this year, up from $5.25 per share last year, and to go to about $6.51 per share next year. ECL has paid dividends to investors since 1936, and has increased its payments for thirty three consecutive years, which makes it a “Dividend Aristocrat.” During the past five years it has increased the dividends at an average rate of 9.94%, with a quarterly payment of 47 cents currently.
Technically (from the chart’s perspective) ECL looks attractive, trading 8.7% below its 52 weeks high, while it is forming a price consolidation pattern between $210 and $181 approximately, in which $181 is acting as a technical support level. The actively managed no-load mutual funds Vanguard Dividend Growth Inv. (VDIGX) and Edgewood Growth Institutional (EGFIX) are major shareholders of ECL, holding 1.4% and 1.0% of its shares respectively. The stock is also one of the 63 holdings of the mutual fund managed by Moneypaper Advisors, the MP 63 Fund (DRIPX). Ecolab’s main competitors are Sealed Air Corp. (SEE) and Sonoco Products Co. (SON)
ECL’s five-year Beta (a measure of the volatility, or systematic risk in comparison to the market as a whole as evidenced by the S&P 500® Index) is 0.80, so the stock is 20% less volatile than the Market.
ECL’s Dividend Reinvestment Plan charges no fees for cash investing, dividend reinvestment, safekeeping, automatic investment or termination of the plan.
With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who wish to build a holding over the long term.
Vita Nelson, www.directinvesting.com, 914-925-0022, January 2, 2020