Comparing Ecolab (NYSE:ECL) & AdvanSix (NYSE:ASIX)

Ecolab (NYSE:ECL) and AdvanSix (NYSE:ASIX) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Institutional & Insider Ownership

74.9% of Ecolab shares are held by institutional investors. Comparatively, 86.4% of AdvanSix shares are held by institutional investors. 0.0% of Ecolab shares are held by company insiders. Comparatively, 5.6% of AdvanSix shares are held by company 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.

Dividends

Ecolab pays an annual dividend of $2.60 per share and has a dividend yield of 0.9%. AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 3.3%. Ecolab pays out 34.7% of its earnings in the form of a dividend. AdvanSix pays out 22.5% 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 raised its dividend for 33 consecutive years and AdvanSix has raised its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ecolab	13.59%	22.52%	8.86%
AdvanSix	5.10%	10.02%	4.97%

Earnings and Valuation

This table compares Ecolab and AdvanSix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ecolab	$15.74 billion	4.98	$2.11 billion	$7.49	36.93
AdvanSix	$1.52 billion	0.35	$44.15 million	$2.84	6.93

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ecolab and AdvanSix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ecolab	0	5	12	3	2.90
AdvanSix	0	1	1	0	2.50

Ecolab presently has a consensus target price of $292.00, indicating a potential upside of 5.57%. AdvanSix has a consensus target price of $33.50, indicating a potential upside of 70.28%. Given AdvanSix’s higher possible upside, analysts plainly believe AdvanSix is more favorable than Ecolab.

Volatility and Risk

Ecolab has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

Summary

Ecolab beats AdvanSix on 12 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 AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.