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 an 11-20% return on
equity. ECL has managed an increase in earnings and dividends through the most
adverse economic environment 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
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.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 1.7 9 29 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 32 17 NA 9 NA
Chart
Note:
ECL made great progress off its March 2009 low, quickly surpassing the downtrend
off its September 2008 high (straight red line) and the November 2008 trading
high (green line). Long term, the stock
is in an uptrend (blue lines).
Intermediate term, it is an uptrend (purple lines). Short term, it recently broke its uptrend (brown
line). The wiggly red line is the 50 day
moving average. Until recently, the
Aggressive Growth Portfolio owned a 50% position in ECL, having Sold Half in
early 2013. In our latest review of the
company, it failed to meet the financial criteria for inclusion in the
Aggressive Growth Universe. Therefore,
it was Sold. ECL still qualifies for
inclusion in the Dividend Growth Universe; but the Dividend Growth Portfolio does
not own this stock.
6/14
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