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

Dividends

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

Valuation and Earnings

This table compares Ecolab and Terravia Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecolab $13.36 billion 2.90 $2.89 billion $4.38 30.57
Terravia Holdings N/A N/A N/A ($1.10) -0.04

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

Analyst Recommendations

This is a breakdown of recent recommendations for Ecolab and Terravia Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 0 9 6 0 2.40
Terravia Holdings 0 1 0 0 2.00

Ecolab presently has a consensus target price of $133.23, indicating a potential downside of 0.51%. Terravia Holdings has a consensus target price of $1.50, indicating a potential upside of 3,659.40%. Given Terravia Holdings’ higher probable upside, analysts clearly believe Terravia Holdings is more favorable than Ecolab.

Profitability

This table compares Ecolab and Terravia Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ecolab 9.66% 18.93% 6.97%
Terravia Holdings -413.48% N/A -61.89%

Institutional & Insider Ownership

75.4% of Ecolab shares are held by institutional investors. Comparatively, 43.4% of Terravia Holdings shares are held by institutional investors. 1.5% of Ecolab shares are held by insiders. Comparatively, 10.1% of Terravia Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Ecolab has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Terravia Holdings has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Summary

Ecolab beats Terravia Holdings on 9 of the 14 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.

Terravia Holdings Company Profile

Solazyme, Inc. creates renewable oils and bioproducts. The Company’s technology uses microalgae in an industrial fermentation process to transform a range of plant-based sugars into triglyceride oils and other bioproducts. The Company offers Algenist, a skin and personal care product available at Sephora S.A. and its affiliates, QVC, Inc., SpaceNK Limited, select Nordstrom stores and ULTA Beauty. It offers intermediates/ingredients, such as Tailored oils, powdered oils, and other closely related products targeted at customers in the industrial products, food products and personal care products markets. The Company’s commercial focus is to sell oils, encapsulated oils and whole algal powdered products to companies that use them as intermediates and ingredients.

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