Ecolab (NYSE: ECL) and Kronos Worldwide (NYSE:KRO) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitabiliy and dividends.

Volatility and Risk

Ecolab has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Kronos Worldwide has a beta of 2.1, meaning that its share price is 110% more volatile than the S&P 500.

Insider & Institutional Ownership

75.7% of Ecolab shares are held by institutional investors. Comparatively, 14.4% of Kronos Worldwide shares are held by institutional investors. 1.5% of Ecolab shares are held by insiders. Comparatively, 0.1% of Kronos Worldwide shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Ecolab and Kronos Worldwide, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 0 7 7 0 2.50
Kronos Worldwide 1 1 0 0 1.50

Ecolab presently has a consensus target price of $132.08, indicating a potential upside of 0.10%. Kronos Worldwide has a consensus target price of $12.00, indicating a potential downside of 42.61%. Given Ecolab’s stronger consensus rating and higher probable upside, research analysts clearly believe Ecolab is more favorable than Kronos Worldwide.

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Kronos Worldwide pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. Ecolab pays out 33.8% of its earnings in the form of a dividend. Kronos Worldwide pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ecolab has raised its dividend for 31 consecutive years.

Valuation & Earnings

This table compares Ecolab and Kronos Worldwide’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecolab $13.36 billion 2.86 $2.88 billion $4.38 30.13
Kronos Worldwide $1.42 billion 1.71 $174.70 million $0.72 29.04

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

Profitability

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

Net Margins Return on Equity Return on Assets
Ecolab 9.66% 18.93% 6.97%
Kronos Worldwide 5.93% 18.70% 6.51%

Summary

Ecolab beats Kronos Worldwide on 15 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.

Kronos Worldwide Company Profile

Kronos Worldwide, Inc. (Kronos) is a producer and marketer of titanium dioxide (TiO2) pigments, a base industrial product that is used in a range of applications. The Company, along with its distributors and agents, sells and provides technical services for its products with sales in Europe and North America. It offers its customers a portfolio of products that include TiO2 pigment grades under the Kronos brand, which provides a range of performance properties. It offers its products to domestic and international paint, plastics, decorative laminate and paper manufacturers. It ships TiO2 to its customers in either a powder or slurry form through rail, truck or ocean carrier. It sells and provides technical services for its products in three end use markets, which include coatings, plastics and paper. It produces TiO2 in two crystalline forms, which include rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate production process.

Receive News & Ratings for Ecolab Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ecolab Inc. and related companies with MarketBeat.com's FREE daily email newsletter.