Ecolab (NYSE: ECL) and Church & Dwight Co. (NYSE:CHD) are both large-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.
Ecolab presently has a consensus target price of $129.31, suggesting a potential downside of 3.74%. Church & Dwight Co. has a consensus target price of $49.40, suggesting a potential downside of 6.03%. Given Ecolab’s stronger consensus rating and higher probable upside, analysts clearly believe Ecolab is more favorable than Church & Dwight Co.. Dividends
Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Church & Dwight Co. pays an annual dividend of $0.71 per share and has a dividend yield of 1.4%. Ecolab pays out 41.1% of its earnings in the form of a dividend. Church & Dwight Co. pays out 40.7% 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 increased its dividend for 31 consecutive years and Church & Dwight Co. has increased its dividend for 11 consecutive years. Church & Dwight Co. is clearly the better dividend stock, given its higher yield and lower payout ratio. Volatility and Risk
Ecolab has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Church & Dwight Co. has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Insider & Institutional Ownership
75.1% of Ecolab shares are held by institutional investors. Comparatively, 78.6% of Church & Dwight Co. shares are held by institutional investors. 1.5% of Ecolab shares are held by company insiders. Comparatively, 2.2% of Church & Dwight Co. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth. Profitability
This table compares Ecolab and Church & Dwight Co.’s net margins, return on equity and return on assets. Earnings & Valuation
This table compares Ecolab and Church & Dwight Co.’s top-line revenue, earnings per share and valuation. Ecolab has higher revenue and earnings than Church & Dwight Co.. Church & Dwight Co. 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 Church & Dwight Co. on 9 of the 17 factors compared between the two stocks.
About Ecolab Ecolab Inc. provides water, hygiene and energy technologies and services. The Company’s cleaning and sanitizing programs and products, pest elimination services and equipment maintenance and repair services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors in over 170 countries. Its segments include Global Industrial, Global Institutional, Global Energy, Other and Corporate. Its Global Industrial segment consists of the Water, Food and Beverage, Paper and Textile Care operating units. Its Global Institutional segment consists of the Institutional, Specialty and Healthcare operating units. The Global Energy segment provides on-site and technology-driven solutions to the global drilling, oil and gas production, refining, and petrochemical industries. The Company’s Other segment consists of the Pest Elimination and Equipment Care operating units.
About Church & Dwight Co. Church & Dwight Co., Inc. develops, manufactures and markets a range of household, personal care and specialty products. The Company’s segments include Consumer Domestic, Consumer International and Specialty Products Division (SPD). The Company also sells specialty products to industrial customers and distributors. The Consumer Domestic segment includes various brands, as well as other household and personal care products, such as KABOOM cleaning products, ARRID antiperspirant, CLOSE-UP and AIM toothpastes and SIMPLY SALINE nasal saline moisturizer. The Consumer International segment markets a range of personal care products, household and over-the-counter products in international markets, including Canada, France, China, Australia, the United Kingdom, Mexico and Brazil. The Company’s SPD segment is a producer of sodium bicarbonate, which it sells together with other specialty inorganic chemicals for various industrial, institutional, medical and food applications.
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