Head-To-Head Review: Ecolab (NYSE:ECL) vs. Elementis (OTCMKTS:ELMTY)

Elementis (OTCMKTS:ELMTY) and Ecolab (NYSE:ECL) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

74.9% of Ecolab shares are held by institutional investors. 0.0% of Ecolab shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Elementis and Ecolab”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elementis	$738.30 million	1.75	-$47.80 million	N/A	N/A
Ecolab	$15.72 billion	4.93	$2.11 billion	$7.49	36.46

Ecolab has higher revenue and earnings than Elementis.

Volatility and Risk

Elementis has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Ecolab has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Elementis and Ecolab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Elementis	N/A	N/A	N/A
Ecolab	13.59%	22.52%	8.86%

Analyst Ratings

This is a summary of recent recommendations for Elementis and Ecolab, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elementis	0	0	0	1	4.00
Ecolab	0	5	11	3	2.89

Ecolab has a consensus target price of $291.21, suggesting a potential upside of 6.64%. Given Ecolab’s higher probable upside, analysts clearly believe Ecolab is more favorable than Elementis.

Dividends

Elementis pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Ecolab pays an annual dividend of $2.60 per share and has a dividend yield of 1.0%. Ecolab pays out 34.7% of its earnings in the form of a dividend. Ecolab has increased its dividend for 33 consecutive years. Ecolab is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ecolab beats Elementis on 14 of the 16 factors compared between the two stocks.

About Elementis

Elementis plc operates as a specialty chemical company in the United Kingdom, rest of Europe, North America, and internationally. It operates in two segments, Performance Specialties and Personal Care. The Performance Specialties segment engages in the production of rheological modifiers and additives for decorative and industrial coatings; and production and supply of talc for use in plastics, coatings, technical ceramics, and paper sectors. The Personal Care segment provides rheological modifiers and compounded products, including active ingredients for antiperspirants (AP) deodorants for personal care manufacturers. The company offers personal care products for antiperspirants, color cosmetics, and skin care applications; and performance specialties products for architectural coatings, adhesives, sealants and construction additives, and talc applications. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.

About Ecolab

Ecolab Inc. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through three segments: Global Industrial; Global Institutional & Specialty; and Global Healthcare & Life Sciences. The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries. Its Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries. The Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names. In addition, the company provides pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, hotels, grocery operations, and other commercial segments including education, life sciences, and healthcare customers. Further, it offers colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management. It sells its products through field sales and corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in Saint Paul, Minnesota.