Head-To-Head Comparison: Versum Materials (VSM) versus Ecolab (ECL)

Ecolab (NYSE: ECL) and Versum Materials (NYSE:VSM) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, valuation, risk, dividends and earnings.

Dividends

Ecolab pays an annual dividend of $1.48 per share and has a dividend yield of 1.1%. Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Ecolab pays out 34.9% of its earnings in the form of a dividend. Versum Materials has increased its dividend for 31 consecutive years.

Valuation and Earnings

This table compares Ecolab and Versum Materials’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ecolab $13.22 billion 2.95 $2.88 billion $4.24 31.67
Versum Materials $1.03 billion 3.31 $338.40 million N/A N/A

Ecolab has higher revenue and earnings than Versum Materials.

Profitability

This table compares Ecolab and Versum Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ecolab 9.47% 18.96% 7.02%
Versum Materials N/A N/A N/A

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ecolab 1 7 8 0 2.44
Versum Materials 0 5 4 0 2.44

Ecolab currently has a consensus target price of $129.31, suggesting a potential downside of 3.70%. Versum Materials has a consensus target price of $31.00, suggesting a potential downside of 0.96%. Given Versum Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Versum Materials is more favorable than Ecolab.

Institutional & Insider Ownership

76.1% of Ecolab shares are owned by institutional investors. Comparatively, 89.9% of Versum Materials shares are owned by institutional investors. 1.5% of Ecolab shares are owned by insiders. Comparatively, 0.5% of Versum Materials shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Ecolab beats Versum Materials on 8 of the 14 factors compared between the two stocks.

Ecolab Company Profile

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.

Versum Materials Company Profile

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

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