Financial Survey: Ecolab (NYSE:ECL) versus H. B. Fuller (NYSE:FUL)

Ecolab (NYSE:ECL) and H. B. Fuller (NYSE:FUL) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Profitability

This table compares Ecolab and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ecolab	12.91%	22.73%	9.08%
H. B. Fuller	4.38%	12.21%	4.55%

Insider and Institutional Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are held by institutional investors. 0.5% of Ecolab shares are held by insiders. Comparatively, 1.8% of H. B. Fuller 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ecolab and H. B. Fuller, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	7	12	1	2.70
H. B. Fuller	1	2	3	0	2.33

Ecolab presently has a consensus target price of $323.56, suggesting a potential upside of 14.37%. H. B. Fuller has a consensus target price of $67.75, suggesting a potential upside of 14.99%. Given H. B. Fuller’s higher probable upside, analysts clearly believe H. B. Fuller is more favorable than Ecolab.

Risk & Volatility

Ecolab has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Valuation & Earnings

This table compares Ecolab and H. B. Fuller”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$16.08 billion	4.96	$2.08 billion	$7.28	38.86
H. B. Fuller	$3.47 billion	0.92	$151.97 million	$3.00	19.64

Ecolab has higher revenue and earnings than H. B. Fuller. H. B. Fuller 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 $2.92 per share and has a dividend yield of 1.0%. H. B. Fuller pays an annual dividend of $0.94 per share and has a dividend yield of 1.6%. Ecolab pays out 40.1% of its earnings in the form of a dividend. H. B. Fuller pays out 31.3% 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 33 consecutive years and H. B. Fuller has increased its dividend for 57 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ecolab beats H. B. Fuller on 11 of the 18 factors compared between the two stocks.

About Ecolab

Ecolab Inc. provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through three segments: Global Industrial; Global Institutional & Specialty; and Global Healthcare & Life Sciences. The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries. Its Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries. The Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names. In addition, the company provides pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, hotels, grocery operations, and other commercial segments including education, life sciences, and healthcare customers. Further, it offers colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management. It sells its products through field sales and corporate account personnel, distributors, and dealers. Ecolab Inc. was founded in 1923 and is headquartered in Saint Paul, Minnesota.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.