Ecolab (NYSE: ECL) and Platform Specialty Products Corporation (NYSE:PAH) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Profitability

This table compares Ecolab and Platform Specialty Products Corporation’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%
Platform Specialty Products Corporation -0.26% 7.15% 2.05%

Valuation & Earnings

This table compares Ecolab and Platform Specialty Products Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecolab $13.36 billion 2.87 $2.89 billion $4.38 30.30
Platform Specialty Products Corporation $3.64 billion 0.91 $732.30 million ($0.44) -26.25

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

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Platform Specialty Products Corporation does not pay a dividend. Ecolab pays out 33.8% of its earnings in the form of a dividend. Ecolab has increased its dividend for 31 consecutive years.

Institutional & Insider Ownership

75.4% of Ecolab shares are held by institutional investors. Comparatively, 93.9% of Platform Specialty Products Corporation shares are held by institutional investors. 1.5% of Ecolab shares are held by company insiders. Comparatively, 6.0% of Platform Specialty Products Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ecolab and Platform Specialty Products Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 0 8 6 0 2.43
Platform Specialty Products Corporation 0 2 6 0 2.75

Ecolab presently has a consensus target price of $132.67, indicating a potential downside of 0.03%. Platform Specialty Products Corporation has a consensus target price of $13.00, indicating a potential upside of 12.55%. Given Platform Specialty Products Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Platform Specialty Products Corporation is more favorable than Ecolab.

Risk and Volatility

Ecolab has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Platform Specialty Products Corporation has a beta of 3.32, meaning that its share price is 232% more volatile than the S&P 500.

Summary

Ecolab beats Platform Specialty Products Corporation on 9 of the 15 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.

Platform Specialty Products Corporation Company Profile

Platform Specialty Products Corporation produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe. It operates through two segments, Performance Solutions and Agricultural Solutions. The Performance Solutions segment offers plating products that are used to plate holes; electroless nickel products, which are applied to various metal and plastic surfaces; electronic assembly materials for use in the electronic market and residential boiler systems; final finishes that are used on printed circuit boards; circuit formation products for surface preparation; oxides, which are used in the fabrication of multilayer circuit boards; semiconductor materials and packaging products; and pre-treatment and cleaning solutions. This segment also provides functional conversion coatings that are applied to metals to enhance corrosion resistance and paint adhesion; hard-coated films, which are used for the membrane switch in the touch screen markets; production and drilling fluids used in subsea control systems; solid sheet printing elements for use in flexographic printing and platemaking processes; liquid products to produce printing plates; and printing equipment. The Agricultural Solutions segment offers fungicides and biofungicides to prevent the spread of fungi and other diseases in crops; herbicides to control unwanted plants; insecticides, bioinsecticides, and acaricides; biostimulants and nutrition products; and seed treatment products, which are applied to seed before planting, as well as animal health products, such as honey bee protective miticides and veterinary vaccines. The company was formerly known as Platform Acquisition Holdings Limited and changed its name to Platform Specialty Products Corporation in October 2013. Platform Specialty Products Corporation was founded in 1922 and is headquartered in West Palm Beach, Florida.

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