Sigma-Aldrich (NASDAQ: SIAL) and Ecolab (NYSE:ECL) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitabiliy, institutional ownership, risk, valuation, earnings and dividends.

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Sigma-Aldrich does not pay a dividend. Ecolab pays out 34.9% of its earnings in the form of a dividend. Sigma-Aldrich has increased its dividend for 31 consecutive years and Ecolab has increased its dividend for 41 consecutive years.

Institutional & Insider Ownership

75.7% of Ecolab shares are held by institutional investors. 1.5% of Ecolab shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Sigma-Aldrich and Ecolab’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sigma-Aldrich 16.22% 13.72% 10.47%
Ecolab 9.47% 18.96% 7.02%

Analyst Recommendations

This is a summary of current ratings for Sigma-Aldrich and Ecolab, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sigma-Aldrich 0 0 0 0 N/A
Ecolab 1 7 8 0 2.44

Ecolab has a consensus target price of $129.31, suggesting a potential downside of 1.96%. Given Ecolab’s higher probable upside, analysts plainly believe Ecolab is more favorable than Sigma-Aldrich.

Valuation and Earnings

This table compares Sigma-Aldrich and Ecolab’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sigma-Aldrich N/A N/A N/A N/A N/A
Ecolab $13.22 billion 2.89 $2.88 billion $4.24 31.11

Ecolab has higher revenue and earnings than Sigma-Aldrich.

Summary

Ecolab beats Sigma-Aldrich on 8 of the 11 factors compared between the two stocks.

Sigma-Aldrich Company Profile

Sigma-Aldrich Corporation is a life science and high technology company. The Company develops, manufactures, purchases and distributes a range of biochemical and organic chemical products, kits and services that are used in scientific research. It manufactures and distributes around 250,000 chemicals, biochemical and other essential products and approximately 46,000 equipment products. Its business unit structure is aligned into three business units: Research, Applied and SAFC Commercial. Its brands include Sigma-Aldrich, Sigma, Aldrich, Fluka, Riedel-de Haen, Supelco, SAFC, SAFC Biosciences, SAFC Hitech, Genosys, Proligo, Pharmorphix, Cerilliant, Vetec, BioReliance and Cell Marque. It offers its products and services to research and applied labs, pharmaceutical companies, universities, commercial laboratories, industrial companies, biotechnology companies and non-profit organizations, among others. It operates in around 37 countries and sells into approximately 160 countries.

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.

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