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Ecolab Declares a Dividend of $0.37 per Share

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Price movement

Ecolab (ECL) has a market cap of $35.4 billion. It rose 0.67% to close at $119.61 per share on December 8, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.95%, 5.3%, and 5.5%, respectively, on the same day. ECL is trading 3.0% above its 20-day moving average, 2.7% above its 50-day moving average, and 2.9% above its 200-day moving average.

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Related ETF and peers

The PowerShares Water Resources ETF (PHO) invests 7.7% of its holdings in Ecolab. The YTD price movement of PHO was 17.3% on December 8. The market caps of Ecolab’s competitors are as follows:

  • 3M (MMM) — $105.9 billion
  • Danaher (DHR) — $53.6 billion
  • ServiceMaster Global Holdings (SERV) — $5.3 billion

Ecolab declares a dividend

Ecolab has declared a quarterly cash dividend of $0.37 per share on its common stock. The dividend will be paid on January 17, 2017, to shareholders of record at the close of business on December 20, 2016.

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Performance of Ecolab in 3Q16

Ecolab reported 3Q16 net sales of $3.4 billion, a fall of 1.7% from the net sales of $3.5 billion reported in 3Q15. The company’s operating margin expanded 500 basis points between 3Q15 and 3Q16.

Its net income and EPS (earnings per share) rose to $374.1 million and $1.27, respectively, in 3Q16, compared with $257.8 million and $0.86 in 3Q15. It reported adjusted EPS of $1.28 in 3Q15 and 3Q16.

Ecolab’s cash and cash equivalents and inventories fell 2.3% and 6.7%, respectively, between 3Q15 and 3Q16. Its current ratio and debt-to-equity ratio fell to 1.0x and 1.6x, respectively, in 3Q16. compared with 1.3x and 1.8x in 3Q15.

Projections

Ecolab has made the following projections for fiscal 2016:

  • adjusted gross margin of ~48%, which excludes special gains and charges
  • net interest expense of ~$265 million
  • adjusted tax rate of 25%–26%
  • adjusted EPS of $4.35–$4.45, which excludes special gains and charges

The company has made the following projections for fiscal 4Q16

  • adjusted gross margin of 48%–49%, which excludes special gains and charges
  • net interest expense of ~$70 million
  • adjusted EPS of $1.23–$1.33, which excludes special gains and charges

In the next part, we’ll look at J&J Snack Foods (JJSF).

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