While this provides reliable cash flow and stable operating margins (see below), it also results in sticky customer relationships that often last for decades. The company has paid cash dividends on its common stock for 80 consecutive years, and its dividend growth has been impressive over the years. Dividend Aristocrat Overview: The Sherwin-Williams Company, Dividend Aristocrat Overview: The Brown-Forman Corporation, Dividend Aristocrats Week in Review for September 27, 2014: Two Utilities Announce Quarterly Dividends, Dividend Aristocrat Overview: Cintas Corporation. Ecolab, Inc.’s Dividend and Stock Split History. While the company plans to pay down some of its debt, Ecolab still has $7.5 billion of debt compared to $212 million of cash on hand. With cleaning and sanitizing products representing a small cost of the customer’s overall operations, Ecolab should retain the business as long as they don’t screw anything up.
This growth came during arguably the worst economic downturn in the U.S. since the Great Depression. Ecolab carries out its value proposition with its 48,000 employees, and over 25,000 of its staff are in customer-facing roles.
Ecolab, Inc.’s Dividend and Stock Split History. 2019 has also been a year of growth for the company. Nalco provides chemical and water treatment services to the petroleum and petrochemical industries, specifically to oilfield services and refineries. If you disagree this service is only available in very limited ways. In 2013, Ecolab acquired Champion Technologies for $2 billion to significantly enhance its position in the upstream energy services market. That long-term trend has hurt many packaged-food specialists, but not the spice and flavorings giant McCormick. The company’s payout ratios are relatively low, it generates strong and consistent free cash flow, and the business is fairly recession-resistant. (function() { However, the company’s consistent free cash flow generation is reliable and easily covers the firm’s interest expenses and dividend payments. Finally, steady stock buybacks help to lower the share count over time. It's also aggressively pursuing hydrogen infrastructure for refueling ground transportation vehicles, which may or may not pan out, but you can't fault the business for trying. Third, Ecolab pushes through modest price increases. Acquisitions such as these, along with organic investment, have fueled steady earnings growth for decades. The company is not afraid to spend significant resources on research and development of new products and services. The stock is in danger of experiencing contraction of the valuation multiple, which would negatively impact total returns. While this isn’t a stock for investors living off dividends in retirement, its long-term growth prospects are very strong.
Ecolab was formed in 1927 as Economics Laboratory (EL). First, the company has a long history of investing in research and development to help launch new products. For example, Ecolab might first win business with a restaurant with its dishwashing technology.
However, Ecolab’s management lowered its guidance for adjusted earnings-per-share to $5.80-$5.90 from $5.80-$6.00. The remainder of Ecolab’s sales come from the Asia/Pacific region (12%) and Latin America (8%). The stock isn't an incredible bargain right now -- shares trade for about 30 times next year's earnings estimates -- but I think that Ecolab is such a high-quality business that investors can still earn good returns from here even though they have to pay a premium to get in. The Global Institutional segment consists of the institutional, specialty and healthcare operating segments. Ecolab is not likely to be an attractive stock for investors interested solely in high levels of income. The Global Industrial group provides water treatment, cleaning, and sanitation. forms : {
The company merged with Nalco in 2011 in an $8 billion deal to become the global leader in water, hygiene, and energy technologies and services. However, even if Ecolab’s business is somewhat more volatile than it was in the past, the company is still extremely durable. Ecolab’s many competitive advantages include scale, a strong reputation among its customers, and innovation. Customers in this segment are primarily large firms in the food and beverage, manufacturing, chemical, and mining industries. High quality dividend aristocrats like these rarely trade at a discount, and Ecolab’s stock appears to be no exception.
Pingback: Does Ecolab Belong on the Dividend Aristocrats List? Ecolab is likely here to stay for many years to come. Ecolab last raised its dividend by 6% in December 2016 and has paid more dividends every calendar year since 1986, making it a member of the S&P Dividend Aristocrats Index. At the end of the day, Ecolab is selling service and consistency (e.g.
Customers are primarily in the foodservice, hospitality, lodging, healthcare, and retail industries. From the end of 2011 to the middle of 2014, Ecolab stock has increased at a compounded rate of 32%, outpacing the compounded rate of 20% of the S&P 500 index during that time. The terms and fees of Ecolab’s plans are very friendly to investors. Since tracking the data, companies cutting their dividends had an average Dividend Safety Score below 20 at the time of their dividend reduction announcements.
In between, EL went public in 1957.
Rock-solid dividend aristocrats you can bank on. Ecolab often spends more than a $1 billion on the innovation pipeline. While Ecolab is an attractive dividend growth stock due to its high rate of dividend increases, it is not as appealing for investors looking for high yields. Ecolab’s many competitive advantages include scale, a strong reputation among its customers, and innovation. Once Ecolab establishes a relationship with a customer, it works to introduce new products and solutions from all of its business segments. From a dividend yield perspective, ECL’s current 1.1% yield is about in line with its five-year average dividend yield of 1.1%.
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