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Ecolab Increases Dividend by 2%

Shauvik Haldar Dec 10, 2020

Ecolab Inc. (ECL) is a leading global company specializing in providing solutions for water, hygiene and infection prevention services. It has a presence in over 170 countries.

Ecolab primarily operates through four segments, with global industrial and global institutional roughly contributing 35% of the company’s revenues in FY 2019. Global energy contributes just over 20% of the company’s revenues, with the rest contributed by other segments.

The global industrial segment consists of water, food & beverage, paper, life sciences and textile care divisions wherein the company provides water treatment and processing solutions. The global institutional segment provides cleaning and sanitizing solutions for foodservice, hospitality, government, healthcare and various retail divisions. The global energy division caters to the needs of processing water and other chemicals for the petroleum and petrochemical industries. The other segment offers various services including pest control and equipment care, among others.

The majority of Ecolab’s sales is derived from North America (nearly 60% in FY 2019), followed by nearly 20% from Europe, 12% from Asia-Pacific regions and the remaining from Latin America, and the Middle East & Africa.

The company has been pretty active in the M&A space, making it one of the biggest players in water management.

Pickup in Institutional Demand

Ecolab moved into Q3 2020 with stronger sales and better business visibility compared to Q2 2020 when it suffered from the COVID-19-inflicted downturn. The company expects gradual recovery in Q4 2020.

All of this prompted the management to raise Ecolab’s quarterly payout from 47 cents per share to 48 cents per share payable to shareholders of record as of December 15, 2020. This was the company’s 29th consecutive year of raising its annual payout.

Looking forward, Ecolab expects to keep its focus on innovation, having more than 10,000 patents and annual R&D expenditure going well over $1 billion.

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