Financial Survey: Methanex (NASDAQ:MEOH) versus Ecolab (NYSE:ECL)

Methanex (NASDAQ:MEOH) and Ecolab (NYSE:ECL) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Dividends

Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.4%. Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Methanex pays out 71.8% of its earnings in the form of a dividend. Ecolab pays out 39.2% 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. Methanex has raised its dividend for 4 consecutive years and Ecolab has raised its dividend for 33 consecutive years.

Risk and Volatility

Methanex has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Ecolab has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Methanex and Ecolab, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methanex	0	5	6	0	2.55
Ecolab	1	3	17	1	2.82

Methanex presently has a consensus price target of $68.56, suggesting a potential upside of 28.07%. Ecolab has a consensus price target of $327.56, suggesting a potential upside of 15.50%. Given Methanex’s higher probable upside, analysts clearly believe Methanex is more favorable than Ecolab.

Valuation & Earnings

This table compares Methanex and Ecolab”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methanex	$4.27 billion	0.97	$79.88 million	$1.03	51.97
Ecolab	$16.08 billion	4.96	$2.08 billion	$7.45	38.07

Ecolab has higher revenue and earnings than Methanex. Ecolab is trading at a lower price-to-earnings ratio than Methanex, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Methanex and Ecolab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Methanex	2.07%	11.35%	4.34%
Ecolab	12.57%	22.72%	8.71%

Institutional & Insider Ownership

73.5% of Methanex shares are owned by institutional investors. Comparatively, 74.9% of Ecolab shares are owned by institutional investors. 1.0% of Methanex shares are owned by insiders. Comparatively, 0.5% of Ecolab shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Ecolab beats Methanex on 14 of the 18 factors compared between the two stocks.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.

About Ecolab

Ecolab Inc. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through three segments: Global Industrial; Global Institutional & Specialty; and Global Healthcare & Life Sciences. The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries. Its Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries. The Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names. In addition, the company provides pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, hotels, grocery operations, and other commercial segments including education, life sciences, and healthcare customers. Further, it offers colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management. It sells its products through field sales and corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in Saint Paul, Minnesota.