Ecolab (NYSE:ECL) & Toray Industries (OTCMKTS:TRYIY) Head-To-Head Review

Toray Industries (OTCMKTS:TRYIY) and Ecolab (NYSE:ECL) are both large-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Dividends

Toray Industries pays an annual dividend of $0.15 per share and has a dividend yield of 0.9%. Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Toray Industries pays out 28.8% of its earnings in the form of a dividend. Ecolab pays out 42.0% 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. Ecolab is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Toray Industries	2.38%	3.26%	1.78%
Ecolab	12.49%	22.55%	8.98%

Valuation & Earnings

This table compares Toray Industries and Ecolab”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$16.83 billion	0.72	$514.21 million	$0.52	31.13
Ecolab	$15.74 billion	5.23	$2.11 billion	$6.96	41.76

Ecolab has lower revenue, but higher earnings than Toray Industries. Toray Industries 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 ratings and target prices for Toray Industries and Ecolab, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	2	0	0	2.00
Ecolab	0	6	10	1	2.71

Ecolab has a consensus target price of $297.33, suggesting a potential upside of 2.31%. Given Ecolab’s stronger consensus rating and higher probable upside, analysts clearly believe Ecolab is more favorable than Toray Industries.

Volatility and Risk

Toray Industries has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Ecolab has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

74.9% of Ecolab shares are owned by institutional investors. 0.0% of Ecolab shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Ecolab beats Toray Industries on 16 of the 18 factors compared between the two stocks.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

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.