Ecolab was founded in 1923 year in Minnesota. Currently company is one of the leaders of cleaning industry providing different water, hygiene and energy technologies and services. Employment around 47 000, operates in more than 170 countries.

Business segments:

  • Global Industrial – cooperation with industry, e.g. manufacturing, chemicals, mining.
  • Global Institutional – cleaning and sanitizing products to foodservice, hospitals, government, education etc.
  • Global Energy – Nalco Champion name, cooperation with petroleum industry
  • Other


Most revenues are recurring and long term.


As it comes to financials (estimates):

Market cap ~ $30B

Net debt ~$6B

Payout ratio ~30%

ROE ~15%

Beta = 1.0

Dividend yield 1.3%


Estimated valuation ratios:

EV/EBITDA = 12.6

P/E = 23.5


Ecolab is one of The Dividend Aristocrats paying dividend from 1986 year. Current dividend yield is around 1.3% – below S&P500 average. Historically company was paying below 2%. With low payout ratio I expect growth rate to be around 10%, nevertheless current yield is unsatisfactory for me.


Drawdown risk analysis:


Ecolab business is stable, which is reflected in share price performance. Drawdowns over last 30 years were not so strong – even in 2008-2009 drawdown was around 40%, which is far less than benchmark. Current drawdown of around 20% seems ok, but on the other hand valuation is extremely high and dividend yield is low. I do not think that Ecolab meets my expectations – nevertheless in case of drawdown to around $85 I think I will buy shares, but still I am not convinced – I am looking for higher dividend yield.


Summing up, I like ECL, but I see no point in buying shares at such high price.


Disclaimer ECL – no position