Ecolab (NYSE: ECL) and Minerals Technologies (NYSE:MTX) 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 institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Volatility & Risk

Ecolab has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Minerals Technologies has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500.

Institutional & Insider Ownership

76.6% of Ecolab shares are held by institutional investors. Comparatively, 94.6% of Minerals Technologies shares are held by institutional investors. 1.5% of Ecolab shares are held by insiders. Comparatively, 2.2% of Minerals Technologies shares are held by 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 Ecolab and Minerals Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ecolab 9.67% 19.05% 6.97%
Minerals Technologies 9.48% 14.59% 5.57%

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Minerals Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. Ecolab pays out 33.3% of its earnings in the form of a dividend. Minerals Technologies pays out 4.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ecolab has increased its dividend for 32 consecutive years. Ecolab is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ecolab $13.15 billion 2.97 $1.23 billion $4.44 30.43
Minerals Technologies $1.64 billion 1.53 $133.40 million $4.38 16.19

Ecolab has higher revenue and earnings than Minerals Technologies. Minerals Technologies 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 summary of recent ratings and target prices for Ecolab and Minerals Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 0 10 6 0 2.38
Minerals Technologies 0 1 1 0 2.50

Ecolab presently has a consensus target price of $136.38, suggesting a potential upside of 0.94%. Minerals Technologies has a consensus target price of $80.00, suggesting a potential upside of 12.83%. Given Minerals Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Minerals Technologies is more favorable than Ecolab.

Summary

Ecolab beats Minerals Technologies on 11 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 operating units.

Minerals Technologies Company Profile

Minerals Technologies Inc. is a resource- and technology-based company that develops, produces and markets a range of specialty mineral, mineral-based and synthetic mineral products and related systems and services around the world. It operates through four segments. The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (PCC), mines mineral ores, and processes and sells natural mineral products, primarily limestone and talc. The Performance Materials segment is a supplier of bentonite and bentonite-related products to industrial and consumer markets globally. The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment. The Energy Services segment offers a range of services to improve the production, costs, compliance and environmental impact of activities performed in the oil and gas industry.

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