Investors in cleaning products supplier Ecolab (
) have enjoyed steady dividend growth and capital appreciation
over many years.
The stock has risen 28% in the past year, about double the
S&P 500's gain. It's currently testing a new high and is at
the upper end of a buying range from a bounce off its 10-week
Meanwhile, Ecolab has hiked its dividend for 21 straight
years, during which the stock has gone from less than 3 a share
to more than 70. The latest dividend increase came in early
December, when the company raised its quarterly payout by 13% to
23 cents a share.
The resulting annual dividend of 92 cents yields 1.2% at the
current share price, well below the S&P 500 average. However,
high dividend yields typically accompany riskier, lower-quality
St. Paul, Minn.-based Ecolab supplies cleaning products to the
hospitality, food service and industrial markets in more than 160
countries. It earns more than 40% of revenue outside the U.S. and
has been developing new technologies and expanding into
faster-growing markets, mainly through acquisitions.
Ecolab said Wednesday it completed its buyout of Mexico-based
Quimiproductos, a top maker of cleaning, sanitizing and water
treatment products. It also recently bought water-treatment
services provider Nalco and specialty chemicals firm
But Zacks Equity Research said Dec. 21 that it's concerned
about currency fluctuations and "aggressive competition" from
rivals Clorox (
) and Church & Dwight (
"Sluggish European markets and raw material price inflation
also remain head winds," said Zacks, which has a neutral rating
on Ecolab's shares.
The stock has an 89 Composite Rating, best in the six-member
Soap & Cleaning Preparations industry group, which was rated
a weak 163 out of 197 as of Friday.
Profit for the fourth quarter is expected to rise 27%, which
would mark the third straight quarter of accelerating earnings
growth. Sales growth has ranged from 74% to 85% over the past
three quarters, after mostly low double-digit and single-digit
growth prior to that.