Ecolab Inc.
Ecolab Inc. Fundamental Analysis
Ecolab Inc. (ECL) shows moderate financial fundamentals with a PE ratio of 33.45, profit margin of 12.80%, and ROE of 21.70%. The company generates $16.4B in annual revenue with weak year-over-year growth of 2.16%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ECL's fundamental strength across five key dimensions:
Efficiency Score
WeakECL struggles to generate sufficient returns from assets.
Valuation Score
WeakECL trades at a premium to fair value.
Growth Score
WeakECL faces weak or negative growth trends.
Financial Health Score
ModerateECL shows balanced financial health with some risks.
Profitability Score
ModerateECL maintains healthy but balanced margins.
Key Financial Metrics
Is ECL Expensive or Cheap?
P/E Ratio
ECL trades at 33.45 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ECL's PEG of 82.62 indicates potential overvaluation.
Price to Book
The market values Ecolab Inc. at 7.04 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 18.80 times EBITDA. This signals the market has high growth expectations.
How Well Does ECL Make Money?
Net Profit Margin
For every $100 in sales, Ecolab Inc. keeps $12.80 as profit after all expenses.
Operating Margin
Core operations generate 17.49 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $21.70 in profit for every $100 of shareholder equity.
ROA
Ecolab Inc. generates $8.41 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ecolab Inc. produces operating cash flow of $3.02B, showing steady but balanced cash generation.
Free Cash Flow
Ecolab Inc. generates strong free cash flow of $1.87B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.63 in free cash annually.
FCF Yield
ECL converts 2.67% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.45
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
82.62
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.04
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.27
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.91
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.99
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.22
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How ECL Stacks Against Its Sector Peers
| Metric | ECL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.45 | 25.16 | Worse (Expensive) |
| ROE | 21.70% | 981.00% | Weak |
| Net Margin | 12.80% | -105445.00% (disorted) | Strong |
| Debt/Equity | 0.91 | 0.52 | Weak (High Leverage) |
| Current Ratio | 0.99 | 6.31 | Weak Liquidity |
| ROA | 8.41% | -3362.00% (disorted) | Weak |
ECL outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ecolab Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
38.18%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
274.48%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
60.80%
Industry Style: Cyclical, Commodity, Value
High Growth