Dividend Aristocrat Overview: Ecolab, Inc.

About Ecolab, Inc.

Ecolab, Incorporated, based in St. Paul, Minnesota, provides a variety of products and services to industrial and commercial customers that enhance food and water safety and reduce the environmental impact of its customers’ businesses.  The company’s customers are in the food, healthcare, energy, hospitality and industrial markets.  Ecolab has 45,000 associates and does business in 170 countries.

Ecolab was formed in 1927 as Economics Laboratory (EL).  Its first product was Absorbit®, an on the spot carpet cleaner that allowed hotels to clean carpets without shutting down.  EL developed its products over time and in 1935 expanded to providing services to their customers.  EL expanded internationally for the first time in 1955, beginning business in Canada.  In 1956, the company expanded to Europe with its first European subsidiary Soilax® A.B. Sweden.  Soilax® A.B. Mexico was created in 1958.  In between, EL went public in 1957.

Economics Laboratory, Inc. changed its name to Ecolab, Inc. in December 1986, the same month that the company was listed on the New York Stock Exchange.

Ecolab generated income of nearly $970 million in 2013, up 37.5% from 2012.  Revenues were up 11.9% in 2013 to $13.2 billion.  The majority (56%) of Ecolab’s sales were generated in North America and roughly a quarter (24%) of the company’s sales were in Europe, the Middle East and Africa.  The remainder of Ecolab’s sales come from the Asia/Pacific region (12%) and Latin America (8%).

The company is a member of the S&P 500 index and a Fortune 500 company, and trades under the ticker symbol ECL.

Ecolab, Inc.’s Dividend and Stock Split History

Ecolab has paid dividends since 1936 and has increased its annual dividend since 1986.  Ecolab met the Dividend Aristocrat criteria of 25 consecutive years of increasing regular dividend payments in 2011.  The company traditionally announces dividend increases in December and pays them early in the following calendar year.  You should plan on owning the stock no later than mid-December to capture the first payment of the increased dividend.

Ecolab began increasing annual dividends in 1986.  Over the last 5 years, ECL has compounded its stock's dividend by nearly 13% per year.

Ecolab began increasing annual dividends in 1986. Over the last 5 years, ECL has compounded its stock’s dividend by nearly 13% per year.

Ecolab has built good short and long term dividend growth records.  At the end of 2012, Ecolab increased the quarterly dividend by 19.6%, from 23 cents to 27.5 cents per share.  Since 1993, annual dividend growth has exceeded 10%, except for 2001 – 2003 and 2009.  From 2008 – 2013, Ecolab’s annual dividend has grown from 53 cents to 96.5 cents per share, resulting in a 5-year compounded annual dividend growth rate (CADGR) of 12.73%.  Longer-term dividend growth rates are similar: Ecolab’s 10 and 20-year CADGR are 12.49% and 12.06%, respectively and the company’s 25-year CADGR is 10.47%.

Ecolab has split its stock many times before and after coming public in 1957.  Since starting its record of annual dividend growth in 1986, Ecolab has split 2-for-1 4 times: in July 1986, January 1994, January 1998, and June 2003.  Prior to this, Ecolab’s stock split 10 times since coming public.  The company issued 5% stock dividends in July 1957, July 1958, July 1959, July 1960, July 1960 and July 1967.  The company also split its stock 3-for-2 in July 1966 and 2-for-1 in April 1964, July 1968 and January 1970.

Ecolab’s stock has grown rapidly since meeting the Dividend Aristocrat criteria of 25 years of dividend growth at the end of 2011.  From the end of 2011 to the middle of 2014, Ecolab stock has increased at a compounded rate of 32%, outpacing the compounded rate of 20% of the S&P 500 index during that time.

Direct Purchase and Dividend Reinvestment Plans

Ecolab has both direct purchase and dividend reinvestment plans.  The terms and fees of Ecolab’s plans are very friendly to investors.  If you’re interested in directly purchasing Ecolab stock, the minimum purchase is $10 and the company pays all the fees and commissions.  Ecolab also picks up all the fees and commissions when you reinvest your dividends.

When you sell your shares in the plan, you’ll pay a fee of $15 or $25 (depending on the type of sell order) plus 10 cents per share.  You’ll be able to minimize sales fees by selling shares in larger quantities.

Helpful Links for Ecolab, Inc.

Ecolab, Inc.’s Investor Relations Website

Current quote and financial summary for Ecolab, Inc. (finviz.com)

Information on the direct purchase and dividend reinvestment plans for ECL

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.

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