) has two good things going for it, if you're an IBD-style
investor seeking a dividend stock.
The giant provider of cleaning-related products and services
has hiked its dividend, and it's also been showing mostly
encouraging chart action.
The St. Paul, Minn.-based company declared on Dec. 6 that it's
raising its quarterly dividend by 15% to 23 cents a share. That
results in an annual dividend of 92 cents, yielding about
"This cash dividend increase reflects our accomplishments this
year and our confidence in our future," CEO Douglas Baker Jr.
said in a news release.
The release also noted that Ecolab has paid cash dividends on
its common stock for 76 straight years, and the latest increase
represents Ecolab's 21st consecutive annual dividend hike.
A yield of 1.3% isn't that impressive, but IBD has long argued
that it's not all about yield.
Consider what William J. O'Neil, IBD's founder and chairman,
once wrote: "If you do buy income stocks, never strain to buy the
highest dividend yield available. That will typically entail much
greater risk and lower quality. Trying to get an extra 2% or 3%
yield can significantly expose your capital to larger
In terms of chart action, Ecolab broke out from a flat base
with a 69.06 buy point in October and has been hitting new highs.
It now stands 2% beyond 69.06.
On the downside, the stock showed weakness Wednesday, falling
3% in big turnover. The move comes as Ecolab takes on $500
million in new debt this week to finance its Champion
Ecolab, No. 17 in Tuesday's IBD Big Cap 20 lineup, has been
making acquisitions in an effort to better position itself for
the future. Its recent buys have included Nalco, which offers
water-treatment services, and Champion, a specialty chemicals
firm serving the energy sector.
Analysts at Credit Suisse wrote last week that the Champion
deal "makes sense financially and strategically and provides ECL
with additional scale technologies to take advantage of the
growing opportunities in the unconventional oil-gas exploration