Ecolab (NYSE:ECL) and Westaim (OTCMKTS:WEDXF) Financial Review

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$17.04 million	40.26	-$16.18 million	($1.40)	-14.60
Ecolab	$15.74 billion	4.96	$2.11 billion	$7.49	36.75

Ecolab has higher revenue and earnings than Westaim. Westaim is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

74.9% of Ecolab shares are held by institutional investors. 4.2% of Westaim shares are held by company insiders. Comparatively, 0.0% of Ecolab shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Westaim and Ecolab, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	0.00
Ecolab	0	5	11	3	2.89

Ecolab has a consensus price target of $292.00, indicating a potential upside of 6.07%. Given Ecolab’s stronger consensus rating and higher possible upside, analysts clearly believe Ecolab is more favorable than Westaim.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westaim	-118.02%	-6.03%	-5.73%
Ecolab	13.59%	22.52%	8.86%

Risk and Volatility

Westaim has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500. Comparatively, Ecolab has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Summary

Ecolab beats Westaim on 13 of the 15 factors compared between the two stocks.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

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.