June 06, 2025 a 11:31 am
ECL: Dividend Analysis - Ecolab Inc.
With a robust dividend history and consistent growth, Ecolab Inc. presents a compelling case for dividend investors. The company has maintained a stable dividend yield despite fluctuating market conditions. Ecolab's consistent dividend payouts over the past 41 years exemplify its dedication to shareholder returns, while its recent dividend growth rates highlight its potential for future income generation.
📊 Overview
Ecolab Inc. operates within the industrial and commercial services sector, which inherently supports stable cash flows conducive to maintaining a predictable dividend policy. With a dividend yield of approximately 0.9441%, and a current dividend per share of 2.34 USD, Ecolab shows its focus on consistent shareholder returns. The impressive 41-year history of dividend payments underscores its commitment, with no recent cuts or suspensions marking its reliability.
| Aspect | Details |
|---|---|
| Sector | Industrial and Commercial Services |
| Dividend Yield | 0.94% |
| Current Dividend per Share | 2.34 USD |
| Dividend History | 41 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Examining Ecolab's dividend history provides insight into its reliability as a dividend payer. Over the past few decades, Ecolab has consistently increased its dividend payments, making it an attractive option for income investors. Such a track record highlights management's commitment to returning cash to shareholders.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.30 |
| 2024 | 2.36 |
| 2023 | 2.16 |
| 2022 | 2.06 |
| 2021 | 1.95 |
📈 Dividend Growth
Dividend growth is a crucial factor for investors looking for compounding income streams. Ecolab's 3-year dividend growth at 6.57% and 5-year growth at 4.99% demonstrate moderate but steady enhancements in its payout policy.
| Time | Growth |
|---|---|
| 3 years | 6.57% |
| 5 years | 4.99% |
The average dividend growth is 4.99% over 5 years. This shows moderate but steady dividend growth.
🔍 Payout Ratio
Payout ratios indicate how well a company's earnings support the dividend. Ecolab maintains an EPS-based payout ratio of 31.49% and a FCF-based ratio of 48.30%, reflecting a balanced approach to dividend distribution and reinvestment in growth.
| Key Figure | Ratio |
|---|---|
| EPS-based | 31.49% |
| Free Cash Flow-based | 48.30% |
The payout ratios suggest that Ecolab is well-positioned to sustain its dividend payments, with room to maneuver during economic uncertainty.
⚙️ Cashflow & Capital Efficiency
Understanding Ecolab's cash flow metrics highlights its ability to fund dividends alongside operational and capital expenses. Monitoring its free cash flow yield, earnings yield, and other efficiency ratios sets expectations for future financial health.
| Aspect | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.73% | 2.90% | 2.59% |
| Earnings Yield | 3.17% | 2.43% | 2.63% |
| CAPEX to Operating Cash Flow | 35.3% | 32.1% | 39.9% |
| Stock-based Compensation to Revenue | 0.86% | 0.62% | 0.62% |
| Free Cash Flow / Operating Cash Flow Ratio | 64.66% | 67.87% | 60.14% |
Ecolab demonstrates strong cash flow management, aiding in dividend sustainability and capital reinvestment, supporting a stable return on invested capital.
💼 Balance Sheet & Leverage Analysis
A solid balance sheet underpins dividend reliability. Analyzing Ecolab's leverage ratios is vital for assessing its financial health and capacity to endure economic downturns.
| Aspect | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.95 | 1.09 | 1.23 |
| Debt-to-Assets | 0.37 | 0.40 | 0.42 |
| Debt-to-Capital | 0.49 | 0.52 | 0.55 |
| Net Debt to EBITDA | 1.83 | 2.58 | 2.99 |
| Current Ratio | 1.32 | 1.30 | 1.30 |
| Quick Ratio | 0.95 | 0.95 | 0.88 |
| Financial Leverage | 2.56 | 2.72 | 2.97 |
Ecolab's debt structure appears manageable, with leverage ratios supportive of long-term financial stability. This positions the company favorably against potential liquidity challenges.
🧑🔬 Fundamental Strength & Profitability
Profitability metrics provide insights into Ecolab's operational effectiveness, with competitive margins and solid returns indicative of its ability to continue profitable growth.
| Aspect | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 24.12% | 17.06% | 15.09% |
| Return on Assets | 9.44% | 6.28% | 5.09% |
| Net Margin | 13.42% | 8.96% | 7.69% |
| EBIT Margin | 18.50% | 13.74% | 11.25% |
| EBITDA Margin | 24.43% | 19.80% | 19.64% |
| Gross Margin | 43.46% | 40.39% | 37.76% |
| Research & Development to Revenue | 0% | 1.25% | 1.34% |
Improvement across key profitability indicators shows Ecolab's competence in maximizing operational margins, facilitating an enduring dividend capability.
📉 Price Development
✅ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
🔍 Rating
In conclusion, Ecolab Inc. demonstrates steady dividend growth and stability, which makes it an attractive prospect for dividend-focused investors. The company's financial metrics suggest a solid foundation for continued payouts, supported by robust operational efficiency. Despite a modest dividend yield, its consistent increases and continuity enhance its investment appeal. Ecolab seems to be a reliable choice for a diversified dividend portfolio.