Head-To-Head Review: Kraton (KRA) & Ecolab (ECL)

Kraton (NYSE: KRA) and Ecolab (NYSE:ECL) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Kraton and Ecolab, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kraton 0 1 2 0 2.67
Ecolab 0 10 6 0 2.38

Kraton presently has a consensus price target of $60.00, suggesting a potential upside of 13.64%. Ecolab has a consensus price target of $136.38, suggesting a potential upside of 0.94%. Given Kraton’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Kraton is more favorable than Ecolab.

Insider & Institutional Ownership

97.5% of Kraton shares are held by institutional investors. Comparatively, 76.6% of Ecolab shares are held by institutional investors. 4.7% of Kraton shares are held by insiders. Comparatively, 1.5% of Ecolab shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Kraton 1.27% 14.19% 2.56%
Ecolab 9.67% 19.05% 6.97%

Risk & Volatility

Kraton has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Ecolab has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Dividends

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kraton $1.74 billion 0.95 $107.30 million $0.77 68.57
Ecolab $13.15 billion 2.97 $1.23 billion $4.44 30.43

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

Summary

Ecolab beats Kraton on 9 of the 17 factors compared between the two stocks.

Kraton Company Profile

Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).

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 operating units.

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