Contrasting Ecolab (ECL) and Sensient Technologies Corporation (SXT)
Ecolab (NYSE: ECL) and Sensient Technologies Corporation (NYSE:SXT) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.
Institutional and Insider Ownership
75.7% of Ecolab shares are owned by institutional investors. Comparatively, 87.5% of Sensient Technologies Corporation shares are owned by institutional investors. 1.5% of Ecolab shares are owned by insiders. Comparatively, 1.0% of Sensient Technologies Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Sensient Technologies Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Ecolab pays out 33.3% of its earnings in the form of a dividend. Sensient Technologies Corporation pays out 54.3% 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 5 consecutive years and Sensient Technologies Corporation has raised its dividend for 31 consecutive years. Sensient Technologies Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Ecolab and Sensient Technologies Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sensient Technologies Corporation||7.89%||17.34%||8.85%|
Valuation and Earnings
This table compares Ecolab and Sensient Technologies Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Ecolab||$13.15 billion||2.92||$1.23 billion||$4.44||29.95|
|Sensient Technologies Corporation||$1.38 billion||2.38||$126.25 million||$2.43||31.22|
Ecolab has higher revenue and earnings than Sensient Technologies Corporation. Ecolab is trading at a lower price-to-earnings ratio than Sensient Technologies Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Ecolab has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Sensient Technologies Corporation has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.
This is a summary of recent recommendations for Ecolab and Sensient Technologies Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sensient Technologies Corporation||0||0||2||0||3.00|
Ecolab currently has a consensus price target of $136.00, suggesting a potential upside of 2.26%. Sensient Technologies Corporation has a consensus price target of $89.15, suggesting a potential upside of 17.50%. Given Sensient Technologies Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Sensient Technologies Corporation is more favorable than Ecolab.
Ecolab beats Sensient Technologies Corporation on 10 of the 17 factors compared between the two stocks.
Ecolab Company Profile
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.
Sensient Technologies Corporation Company Profile
Sensient Technologies Corporation is a manufacturer and marketer of colors, flavors and fragrances. The Company uses technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, specialty inks and colors, and other specialty and fine chemicals. The Company’s three segments include the Flavors & Fragrances Group and the Color Group, which are managed on a product-and-services basis, and the Asia Pacific Group, which is managed on a geographic basis. The Company’s principal products include flavors, flavor enhancers and bionutrients; fragrances, aroma chemicals and essential oils; natural ingredients, including dehydrated vegetables and other food ingredients; natural and synthetic food and beverage colors; cosmetic colors and ingredients and pharmaceutical excipients and ingredients, and technical colors, specialty inks and colors, and specialty dyes and pigments.
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