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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ecolab Inc. (XNYS:ECL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ECL
Name:
ECOLAB INC. (XNYS:ECL)
Sector:
21.40M
Industry:
Specialty Chemicals
CEO:
Mr. Douglas Baker
Total Employees:
47,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -199.34% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ECOLAB INC.(ECL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
161.64
One Month Price Target:
$162.56
Six Month Price Target :
$167.15
Likely Price in One Year's Time:
Ticker:
$172.65
Likely Trading Range Today Under (Normal Volatility)
$161.03
Price Upper limit ($) :
$162.27
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$154.15
This week:
$144.9
This month :
$128.15
Other Primary facts
Market Cap:
46.47B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
284.99M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.16%
-11.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$196.41
$180.58
$126.87
$142.70
Medium risk (<10%) entry points
Buy Call
Sell Call
$175.43
Buy Put:
Sell Put:
$172.06
$147.80
$151.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ECL
Sharpe Ratio:
-0.15%
Comparison:
ECL, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -106.89% lower than the industry
& is -106.40% lower than the market/S&P 500 average
Average Returns/Yield of
ECL
Daily returns:
0.01%
Weekly returns:
0.03%
Monthly returns:
0.11%
Yearly returns:
24.57%
Comparison of returns:
Average annual returns/yield (last 3 years) is -94.57% below industry average
Classification:
ECL, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.63
Statistical test of Returns:
ECL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.26%
Weekly Volatility:
5.05%
Monthly Volatility:
10.10%
Yearly Volatility:
34.98%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.56%
Volatility in last five trading days has been -75.17% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.63%
Weekly VaR:
-10.36%
Monthly VaR:
-20.72%
How Much Can the price of
ECL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.76%
This translates to price declining to:
$132.13
This translates to price declining to:
$45.64
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ECL is a 46.21% riskier investment compared to the market/S&P 500 & is 25.26% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -32.82% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ECL
Beta in relation to market/S&P 500--1.01
Expected beta in 1 year's time:
0.877
Expected beta in 3 year's time:
1.24
Unlevered (debt free) Beta:
0.51
Beta in relation to Nasdaq (XNAS):
0.798
Beta in relation to all global stocks::
0.831
Beta Comparison & Analysis
Beta of competitors/peers::
1.127
Beta is -10.04% lower than peers
Average Industry Beta:
1.164
Beta is -12.91% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.75%
Sustainable growth rate is -69.72% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.088
Alpha is -165.18% below industry average alpha yield
Alpha is -558% below the market average
Analysis of Cost of Capital of
ECL
Equity cost of capital:
0.101
Equity cost of capital is -9.26% below industry mean WACC
Unlevered (without debt) cost of capital:
5.08%
Before-tax cost of debt:
2.54%
After-tax cost of debt:
2.00%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
2.00%
WACC is -21.19% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$46.02
Revenue growth rate per share of (3Y):
6.48
Annual revenue growth rate is -837.66% below industry average
EPS:
$3.83
Expected Annual growth rate of EPS (3Y):
-10.26%
Expected future EPS growth rate is -1231.56% lower than the Specialty Chemicals industry
Free cash flow (FCF) per share:
$4.25
Balance sheet equity growth per share: 15.00%
Equity growth rate per share is 43.42% higher than the industry
Debt per share
$29.97
EBITDA per share
$8.61
Valuation Analysis Today of
ECL
P/E Ratio:
42.15
P/E Ratio of Competitors/Peers:
20.26
P/E ratio is 108.08% higher than main peers & is 12.53% higher than the industry
Stock price/value with industry average P/E ratio: $143.47
ECL is 12.67% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $32.51
Present value of the expected future dividends only: $21.90
P/S (Price to Sales ratio):
3.51
Price to sales ratio is 27.30% above the industry mean
P/B (Price to book value ratio):
6.48
Price to free cash flow: 38.04
Price to free cash flow ratio is -9.83% lower than the industry
Net income growth rate (3Y):
-20.30%
Net income growth rate is -63.28% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 13.90%
Dividend yeild: 1.24%
Previous Dividend: $0.51
Previous adjusted dividend: $0.51
Previous Dividend: $2.01
Expected next dividend best case: $0.52
Expected next dividend worst case: $0.50
Average dividend payment (long-term): $0.48
Average dividend increase/decrease (growth rate) % per period: 0.84%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 19/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 21/06/2022
-
Dividend History:
2022-06-17--$0.51
2021-12-13--$0.51
2021-06-14--$0.48
2022-03-14--$0.51
2021-09-13--$0.48
2021-03-15--$0.48
Dividend growth rate is -95.91% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
120.63%
Net debt to equity ratio:
127.76%
Debt to assets ratio:
40.55%
Net debt to assets ratio:
42.94%
Debt-to-asset ratio is -25.05% below industry average
Ability to repay debt:
Interest coverage ratio:
10.58
Interest coverage ratio is -49.71% less than industry average
Looking forward:
Debt growth rate:
28.73%
Annual debt growth is -92% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.768
Statistical significance of correlation:
ECL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.58
Stock price is 32.52% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.58
Correlation of price movement with Nasdaq (^IXIC):
0.004
Covariance of price movement with the market:
0.005
Kurtosis
17.663
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.762
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ECL
Gross Profit Margin Ratio:
157%
Operating Profit Margin Ratio:
11.86%
Operating profit margin is -104.21% lower than the industry
Net Profit Margin Ratio:
157%
Effective Tax Rate:
18.20%
Effective tax rate is 1.36% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.65%
Return on equity (ROE) is -45.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.26%
Return on assets (ROA) is 100.31% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
1.27
Current ratio is -52.70% below industry average
Cash Conversion Cycle (days):
46.7
Cash conversion cycle is -24.37% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
2.54%
In-depth Efficiency Analysis
Revenue generated per employee:
279.0K
Each employee generates -63% less revenue than industry average revenue per employee
EBITDA generated per employee:
52.2K
Each employee generates -47% less EBITDA than industry average revenue per employee
Profit generated per employee:
23.6K
Each employee generates -26% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.5K
Each employee generates -101% less free cash flow than industry average revenue per employee
Assets/Capital per employee
350.3K
Each employee generates -101% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ECL
AIR PRODUCTS AND CHEMICALS, INC. (XNYS:APD)
FREEPORT-MCMORAN INC. (XNYS:FCX)
Vale SA (XNYS:VALE)
NEWMONT CORPORATION (XNYS:NEM)
THE SHERWIN-WILLIAMS COMPANY (XNYS:SHW)
Dow Inc. (XNYS:DOW)
DuPont de Nemours, Inc. (XNYS:DD)
CRH PUBLIC LIMITED COMPANY (XNYS:CRH)
PPG INDUSTRIES, INC. (XNYS:PPG)
Current Analyst Ratings
Strong buy�25%
Buy�25%
Hold�38%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
13.11B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
7.98B
5.14B
-
-
3.47B
-
-
3.47B
12.30M
231.90M
862.60M
2.45B
1.56B
1.11B
1.37B
249.70M
1.11B
Statement of Cash Flow
Date:
Period:
234.70M
Differed Income Tax :
- 15700.00K
Stock Based Compensation :
28.20M
Change in Working Capital :
- 224700.00K
Accounts Receivables:
- 29600.00K
Other Working Capital:
-
Other Non-Cash Items:
- 27100.00K
Net Cash Provided by Operating Activities:
170.10M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
99.40M
-
99.40M
2.66B
1.59B
253.10M
4.60B
3.67B
8.08B
4.14B
-
126.50M
445.40M
16.46B
-
21.07B
1.42B
604.30M
238.40M
96.80M
1.51B
3.63B
8.54B
1.17B
10.33B
-
13.96B
364.50M
8.84B
- 1563600.0K
-
March 31, 2022 at 6:00:00 AM
11.45B
7.08B
21.04B
-
9.15B
9.0B
-
- 129200.00K
- 129200.00K
-
-
- 262100.00K
- 154000.00K
110.80M
- 305300.00K
3.90M
- 260500.00K
99.40M
359.90M
170.10M
- 148700.00K
21.40M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
ECL
2023
2024
2025
2026
2027
$161.54
$172.54
$184.30
$196.86
$210.27