Ecolab (NYSE: ECL) and OM Group (NYSE:OMG) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Ecolab and OM Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ecolab 9.66% 18.93% 6.97%
OM Group 3.68% 4.22% 2.58%

Analyst Ratings

This is a summary of current recommendations for Ecolab and OM Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 0 8 7 0 2.47
OM Group 0 0 0 0 N/A

Ecolab currently has a consensus target price of $133.08, indicating a potential upside of 1.21%. Given Ecolab’s higher possible upside, analysts plainly believe Ecolab is more favorable than OM Group.

Earnings and Valuation

This table compares Ecolab and OM Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecolab $13.36 billion 2.85 $2.89 billion $4.38 30.02
OM Group N/A N/A N/A N/A N/A

Ecolab has higher revenue and earnings than OM Group.

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. OM Group does not pay a dividend. Ecolab pays out 33.8% of its earnings in the form of a dividend. OM Group has increased its dividend for 31 consecutive years.

Institutional & Insider Ownership

75.7% of Ecolab shares are owned by institutional investors. 1.5% of Ecolab shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Ecolab beats OM Group on 9 of the 11 factors compared between the two stocks.

About Ecolab

Ecolab Inc. provides water, hygiene and energy technologies and services. The Company’s cleaning and sanitizing programs and products, pest elimination services and equipment maintenance and repair services support customers in the foodservice, food and beverage processing, hospitality, healthcare, government and education, retail, textile care and commercial facilities management sectors in over 170 countries. Its segments include Global Industrial, Global Institutional, Global Energy, Other and Corporate. Its Global Industrial segment consists of the Water, Food and Beverage, Paper and Textile Care operating units. Its Global Institutional segment consists of the Institutional, Specialty and Healthcare operating units. The Global Energy segment provides on-site and technology-driven solutions to the global drilling, oil and gas production, refining, and petrochemical industries. The Company’s Other segment consists of the Pest Elimination and Equipment Care operating units.

About OM Group

OM Group, Inc. is a United States-based industrial company. The Company is engaged in serving global markets, including automotive systems, electronic devices, aerospace and defense, industrial and medical. It operates in three business segments: Magnetic Technologies, Battery Technologies and Specialty Chemicals. Its Magnetic Technologies segment develops, manufactures and distributes industrial-use magnetic materials and related products to an array of end markets, including automotive systems, electrical installation technology, industrial, retail and renewable energy. The Company’s Battery Technologies segment provides batteries, battery management systems, and energetic devices for defense, space and medical markets. The Company’s Specialty Chemicals segment develops, produces and supplies chemicals for electronic applications, industrial applications including coatings, composites and tire, and photomasks used by customers to produce semiconductors and related products.

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