Ecolab (ECL) Rewards Shareholders With 6% Dividend Hike

Ushering in good news for its shareholders, Ecolab Inc. (NYSE:ECL) declared a quarterly cash dividend of 37 cents per share, reflecting a 6% increase from the previous payout.

Shares of Ecolab climbed almost 0.6%, to close at $119.61 following the news release. Based on yesterday’s closing price, the stock reflects a dividend yield of 1.2% (on an annualized basis).

A glimpse on the recent price movement of the stock reveals a year-to-date return of 3.9%, better than the Zacks categorized Chemicals-Specialty sub-industry’s return of 2.5%. In this regard, Ecolab has a long-term expected earnings growth rate of 13.4% and an earnings yield of 3.8%, comparing favorably with the industry average of 2.8%. Furthermore, the average sales growth rate of around 11.0% over the last five years instills confidence among investors.

Ecolab would pay the new dividend on Jan 17, 2017, to shareholders of record at the close of business on Dec 20, 2016. This increase results in a new indicated annual cash dividend of $1.48 per share in 2017 and represents Ecolab’s 25th consecutive annual hike. The company has paid cash dividends on its common stock for 80 consecutive years.

Ecolab’s growing focus on water management and conservation, innovative product portfolio and strategic acquisitions are its key catalysts. We believe a robust product portfolio, new product launches and an expanding customer base will drive the company’s organic sales. Also, the realization of targeted synergies associated with acquisitions should help in margin expansion.

The recent takeover offer for France-based Laboratoires Anios will expand Ecolab’s institutional customer base and service coverage, particularly in the healthcare, food service, and food & beverage processing industries. Moreover, it will strengthen the company’s footprint in the emerging markets of Latin America and Asia-Pacific.

St. Paul, MN-based Ecolab is a leading provider of cleaning, sanitizing, food safety and infection prevention products and services.

Zacks Rank & Key Picks

Currently, Ecolab has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector include Addus HomeCare Corporation (NASDAQ:ADUS) , LHC Group, Inc. (NASDAQ:LHCG) and HMS Holdings Corp. (NASDAQ:HMSY) . Addus HomeCare and LHC Group sport a Zacks Rank #1 (Strong Buy), while HMS Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of almost 43.9%.

LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 20.5% in the last three months.

HMS Holdings has an expected earnings growth of almost 14.3%. The company posted a promising year-to-date return of almost 52.1%.

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