Investors in cleaning products supplier Ecolab ( ECL ) 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 line.
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 stocks.
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 Champion.
"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.