Ecolabs (ECL) 2013 Review

Ecolab Inc. (ECL) develops and markets chemicals and services for cleaning, pest elimination, sanitizing and maintenance to the hospitality, institutional and industrial markets. The company has grown its profits and dividends 11-13% over the last 10 years while earning a 15-20% return on equity. Despite the 2007/2008 softening in the global economy, ECL still managed an increase in earnings and should continue to grow at an above average pace as a result of:

(1) the company’s exposure to the international market, in particular emerging markets, which is expanding at an above average pace,

(2) industry leading technology and aggressive product innovation,

(3) acquisitions,

(4) aggressive cost containment, including divest low return operations

(5) stock buy back program.

Negatives:

(1) ECL is in a highly competitive industry,

(2) fluctuations in raw material costs,

(3) integration costs from acquisitions,

(4) fluctuations in currency exchange rates.

ECL is rated A by Value Line, has a debt/equity ratio of 49%, its stock yields 1.1%.

Statistical Summary

                 Stock       Dividend       Payout      # Increases  

                Yield      Growth Rate     Ratio       Since 2003

ECL           1.1%           6%             21%             10

Ind Ave      1.4              8                22               NA 

                Debt/                        EPS Down       Net        Value Line

                Equity         ROE      Since 2003      Margin       Rating

ECL          49%            17%            0                 9%            A

Ind Ave     33               17             NA                9             NA

  

     Chart

            Note: ECL stock made great progress off its Mrach2009 low, quickly surpassing the downtrend off its September 2008 high (red line) and the November 2008 trading high (green).  Long term, it is in an uptrend (straight blue lines).  Intermediate term, it is in an uptrend (purple lines).  Short term, it is in an uptrend (brown line).  The wiggly blue line is on balance volume.  The Aggressive Growth Portfolio owns a 50% position in ECL having Sold Half when the stock entered that Range.  The upper boundary of its Buy Value Range is $48; the lower boundary of its Sell Half Range is $82.

   

         

                                                                                                           

http://finance.yahoo.com/q?s=ECL

7/13