Ecolab (NYSE:ECL – Get Free Report) and PPG Industries (NYSE:PPG – Get Free Report) are both large-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.
Profitability
This table compares Ecolab and PPG Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ecolab | 12.91% | 22.73% | 9.08% |
| PPG Industries | 9.93% | 22.30% | 7.87% |
Analyst Ratings
This is a summary of recent recommendations for Ecolab and PPG Industries, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ecolab | 0 | 5 | 14 | 1 | 2.80 |
| PPG Industries | 0 | 11 | 6 | 1 | 2.44 |
Dividends
Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.1%. PPG Industries pays an annual dividend of $2.84 per share and has a dividend yield of 2.7%. Ecolab pays out 40.1% of its earnings in the form of a dividend. PPG Industries pays out 40.9% 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 and PPG Industries has raised its dividend for 54 consecutive years. PPG Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
74.9% of Ecolab shares are owned by institutional investors. Comparatively, 81.9% of PPG Industries shares are owned by institutional investors. 0.0% of Ecolab shares are owned by company insiders. Comparatively, 0.3% of PPG Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Ecolab and PPG Industries”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ecolab | $16.08 billion | 4.73 | $2.08 billion | $7.28 | 37.02 |
| PPG Industries | $15.88 billion | 1.50 | $1.58 billion | $6.94 | 15.34 |
Ecolab has higher revenue and earnings than PPG Industries. PPG Industries is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Ecolab has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, PPG Industries has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
Summary
Ecolab beats PPG Industries on 12 of the 17 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 PPG Industries
PPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through two segments, Performance Coatings and Industrial Coatings. The Performance Coatings segment offers coatings, solvents, adhesives, sealants, sundries, and software for automotive and commercial transport/fleet repair and refurbishing, light industrial coatings, and specialty coatings for signs; wood stains; paints, thermoplastics, pavement marking products, and other advanced technologies for pavement marking for government, commercial infrastructure, painting, and maintenance contractors; and coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft. The Industrial Coatings segment offers coatings, adhesives and sealants, and metal pretreatments, as well as services and coatings applications for appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products, kitchenware, and transportation vehicles and other finished products; and on-site coatings services. It also provides coatings for metal cans, closures, plastic and aluminum tubes for food, beverage and personal care, promotional, and specialty packaging; amorphous precipitated silica for tire, battery separator, and other end-uses; TESLIN substrates for labels, e-passports, drivers' licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes. PPG Industries, Inc. was incorporated in 1883 and is headquartered in Pittsburgh, Pennsylvania.
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