Albemarle (NYSE:ALB – Get Free Report) and Ecolab (NYSE:ECL – Get Free Report) are both large-cap materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.
Dividends
Albemarle pays an annual dividend of $1.64 per share and has a dividend yield of 1.7%. Ecolab pays an annual dividend of $2.92 per share and has a dividend yield of 1.0%. Albemarle pays out 39.6% of its earnings in the form of a dividend. Ecolab pays out 39.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Albemarle has raised its dividend for 30 consecutive years and Ecolab has raised its dividend for 33 consecutive years. Albemarle is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Albemarle has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Ecolab has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.
Institutional & Insider Ownership
92.9% of Albemarle shares are owned by institutional investors. Comparatively, 74.9% of Ecolab shares are owned by institutional investors. 0.4% of Albemarle shares are owned by company insiders. Comparatively, 0.5% of Ecolab shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Albemarle and Ecolab”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Albemarle | $5.14 billion | 2.18 | -$510.63 million | $4.14 | 22.94 |
| Ecolab | $16.08 billion | 5.34 | $2.08 billion | $7.35 | 41.68 |
Ecolab has higher revenue and earnings than Albemarle. Albemarle 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 Albemarle and Ecolab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Albemarle | 10.40% | 14.91% | 7.58% |
| Ecolab | 11.99% | 22.57% | 8.23% |
Analyst Recommendations
This is a summary of current ratings for Albemarle and Ecolab, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Albemarle | 1 | 9 | 15 | 0 | 2.56 |
| Ecolab | 0 | 3 | 18 | 1 | 2.91 |
Albemarle presently has a consensus target price of $174.05, indicating a potential upside of 83.25%. Ecolab has a consensus target price of $328.58, indicating a potential upside of 7.26%. Given Albemarle’s higher possible upside, equities analysts plainly believe Albemarle is more favorable than Ecolab.
Summary
Ecolab beats Albemarle on 13 of the 18 factors compared between the two stocks.
About Albemarle
Albemarle Corporation is a specialty chemicals company that produces lithium, bromine and refining catalysts. Its products serve industries including energy storage, transportation, electronics, petroleum refining and pharmaceuticals. The company supplies lithium compounds used in rechargeable batteries and other applications. It also makes bromine-based products for uses such as flame retardants and water treatment, along with catalysts used in refining petroleum. Albemarle traces its history to 1887 and is headquartered in Charlotte, North Carolina.
About Ecolab
Ecolab Inc. provides water, hygiene, cleaning and infection-prevention products and services to businesses and institutions. Its solutions help customers manage water use, maintain sanitary environments and support operational efficiency. The company serves a range of industries, including food and beverage, foodservice, hospitality, healthcare, life sciences and manufacturing. Its offerings include cleaning and sanitizing products, water-treatment programs, pest-elimination services, and related monitoring and consulting support.
Receive News & Ratings for Albemarle Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Albemarle and related companies with MarketBeat.com's FREE daily email newsletter.
