Ecolab Inc. (ECL) stock analysis

P/E above its 5-year median

Ecolab's P/E of 41.9 is above its own 5-year median of 41.1.

P/E above the industry

Ecolab's P/E of 41.9 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 29.9.

EV/EBITDA above its 5-year median

Ecolab's EV/EBITDA of 34.1 is above its 5-year median of 33.6.

P/B above the industry

Ecolab's price-to-book of 8.28 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 4.86.

Trading above fair value

The share price of $307.86 is above our fair value estimate of $241.95.

Margin of safety under 20%

The price is 27.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 24.1% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 9.3% over the last twelve months; the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median is 5.9%.

Guidance raised

Ecolab raised its second half of the year Organic sales growth outlook on Jul 28, 2026.

Gross margin slipping

Gross margin was 43.9% over the last twelve months, against 44.3% a year earlier.

Return on equity over 15%

Return on equity was 20.7% over the last twelve months and averaged 19.5% over five years.

Return on capital over 10%

Return on invested capital was 12.1%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Ecolab's return on equity of 20.7% is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of -1.2%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 12.0% over the last twelve months, against a 5-year average of 10.4%.

Net margin above the industry

Ecolab's net margin of 12.0% is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 0.2%.

High debt

Debt is 127% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 108% five years ago to 127%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 23.0% of total debt.

Interest well covered

Operating income covers interest expense 7.4 times.

Short-term assets cover short-term debts

Current assets are 1.11 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.02; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Ecolab paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Ecolab yields 0.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 39.3% of net income.

Covered by free cash flow

Dividends take 45.6% of free cash flow.