Huntsman (NYSE: HUN) and Ecolab (NYSE:ECL) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.
This table compares Huntsman and Ecolab’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations and price targets for Huntsman and Ecolab, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Huntsman presently has a consensus target price of $36.20, indicating a potential upside of 23.80%. Ecolab has a consensus target price of $139.47, indicating a potential upside of 3.90%. Given Huntsman’s stronger consensus rating and higher probable upside, analysts plainly believe Huntsman is more favorable than Ecolab.
Institutional & Insider Ownership
76.0% of Huntsman shares are held by institutional investors. Comparatively, 78.3% of Ecolab shares are held by institutional investors. 19.0% of Huntsman shares are held by company insiders. Comparatively, 1.5% of Ecolab shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Huntsman pays an annual dividend of $0.65 per share and has a dividend yield of 2.2%. Ecolab pays an annual dividend of $1.64 per share and has a dividend yield of 1.2%. Huntsman pays out 25.0% of its earnings in the form of a dividend. Ecolab pays out 31.9% 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 32 consecutive years. Huntsman is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Huntsman has a beta of 2.71, suggesting that its stock price is 171% more volatile than the S&P 500. Comparatively, Ecolab has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.
Earnings and Valuation
This table compares Huntsman and Ecolab’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Huntsman||$8.36 billion||0.85||$636.00 million||$2.60||11.25|
|Ecolab||$13.84 billion||2.80||$1.51 billion||$5.14||26.11|
Ecolab has higher revenue and earnings than Huntsman. Huntsman is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.
Huntsman beats Ecolab on 9 of the 17 factors compared between the two stocks.
Huntsman Corporation is a manufacturer of differentiated organic chemical products and of inorganic chemical products. The Company operates all of its businesses through its subsidiary, Huntsman International LLC (Huntsman International). The Company operates through five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. Its Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and its Pigments and Additives segment produces inorganic chemical products. The Company’s products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, digital inks, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries.
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.
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