Ecolab (NYSE:ECL) versus International Flavors & Fragrances (NYSE:IFF) Head-To-Head Contrast

Ecolab (NYSE:ECL) and International Flavors & Fragrances (NYSE:IFF) are both large-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Institutional and Insider Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 96.0% of International Flavors & Fragrances shares are held by institutional investors. 0.0% of Ecolab shares are held by company insiders. Comparatively, 0.2% of International Flavors & Fragrances 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.

Risk & Volatility

Ecolab has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, International Flavors & Fragrances has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Profitability

This table compares Ecolab and International Flavors & Fragrances’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ecolab	13.59%	22.52%	8.86%
International Flavors & Fragrances	-3.48%	7.95%	3.97%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ecolab and International Flavors & Fragrances, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	5	12	3	2.90
International Flavors & Fragrances	2	4	13	0	2.58

Ecolab currently has a consensus target price of $292.29, indicating a potential upside of 7.54%. International Flavors & Fragrances has a consensus target price of $87.57, indicating a potential upside of 46.96%. Given International Flavors & Fragrances’ higher possible upside, analysts plainly believe International Flavors & Fragrances is more favorable than Ecolab.

Dividends

Ecolab pays an annual dividend of $2.60 per share and has a dividend yield of 1.0%. International Flavors & Fragrances pays an annual dividend of $1.60 per share and has a dividend yield of 2.7%. Ecolab pays out 34.7% of its earnings in the form of a dividend. International Flavors & Fragrances pays out -103.2% 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 33 consecutive years. International Flavors & Fragrances is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Ecolab and International Flavors & Fragrances”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$15.74 billion	4.90	$2.11 billion	$7.49	36.29
International Flavors & Fragrances	$11.48 billion	1.33	$243.00 million	($1.55)	-38.45

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

Summary

Ecolab beats International Flavors & Fragrances on 12 of the 18 factors compared between the two stocks.

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.

About International Flavors & Fragrances

International Flavors & Fragrances, Inc. engages in the manufacture and supply of flavors and fragrances used in the food, beverage, personal care, and household products industries. It operates through the following segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. The Nourish segment consists of legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division. The Health & Biosciences business consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications. The Scent business creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. The Pharma Solutions business produces a vast portfolio including cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling. The company was founded in 1833 and is headquartered in New York, NY.