Critical Comparison: Chemtura (CHMT) vs. Ecolab (ECL)

Chemtura (NYSE: CHMT) and Ecolab (NYSE:ECL) are both specialty chemicals – nec companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Chemtura and Ecolab, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chemtura 0 0 0 0 N/A
Ecolab 0 10 6 0 2.38

Ecolab has a consensus price target of $136.38, suggesting a potential upside of 1.15%. Given Ecolab’s higher possible upside, analysts plainly believe Ecolab is more favorable than Chemtura.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chemtura N/A N/A N/A ($0.19) -176.32
Ecolab $13.15 billion 2.96 $1.23 billion $4.44 30.37

Ecolab has higher revenue and earnings than Chemtura. Chemtura is trading at a lower price-to-earnings ratio than Ecolab, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Chemtura 5.71% 9.00% 4.02%
Ecolab 9.67% 19.05% 6.97%

Institutional and Insider Ownership

93.1% of Chemtura shares are held by institutional investors. Comparatively, 76.6% of Ecolab shares are held by institutional investors. 2.6% of Chemtura shares are held by company insiders. Comparatively, 1.5% of Ecolab shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Chemtura does not pay a dividend. Ecolab pays out 33.3% of its earnings in the form of a dividend. Chemtura has raised its dividend for 32 consecutive years.

Summary

Ecolab beats Chemtura on 9 of the 13 factors compared between the two stocks.

About Chemtura

Chemtura Corporation is a chemical company. The Company is engaged in developing, manufacturing and marketing of engineered industrial specialty chemicals. The Company’s products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates. The Company’s segments are Industrial Performance Products and Industrial Engineered Products. The Industrial Performance Products segment manufactures and markets lubricant additive components, synthetic lubricant base-stocks, synthetic finished fluids, calcium sulfonate specialty greases and phosphate and polyester based fluids, and is also engaged in the development and production of hot cast elastomer pre-polymers. The Industrial Engineered Products segment develops and manufactures bromine and bromine-based products and organometallic compounds. The Company operates in a range of industries, including automotive, building and construction, electronics, lubricants, packaging and transportation.

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 operating units.

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