10 Best Soaps and Cleaning Materials Stocks to Invest In

4. Ecolab Inc. (NYSE:ECL)

Number of Hedge Fund Holders: 47

Ecolab Inc. (NYSE:ECL) offers hygiene, water, and infection prevention solutions and services. The company’s Global Institutional & Specialty, and Global Healthcare & Life Sciences segments provide specialized cleaning and sanitizing products.

Revenue for the company’s fiscal Q3 2024 was just under $4 billion, showing a 1% increase from fiscal Q3 2023 despite headwinds. The company’s effective cost strategies and strong sales performance across core segments were the primary reasons behind this trend. Its cost management strategies led to a 260 basis points rise in its organic operating income margin, reaching 17.9%. Ecolab Inc.’s (NYSE:ECL) free cash flow also increased by 35% to $1.4 billion, reflecting the company’s financial stability. This allowed it to repurchase 1.9 million shares.

In its outlook for fiscal 2024, the company expects its adjusted EPS to demonstrate a 27% to 29% improvement over 2023. This upward trend reflects confidence in Ecolab Inc.’s (NYSE:ECL) present business drivers, including operational efficiencies and strategic acquisitions. The company is optimistic about attaining 12% to 15% adjusted EPS growth in fiscal 2025. Its existing investments in sustainable and innovative solutions are expected to support this growth.

Mairs & Power stated the following regarding Ecolab Inc. (NYSE:ECL) in its fourth quarter 2023 investor letter:

“All of our Materials holdings—Ecolab Inc. (NYSE:ECL), HB Fuller (FUL), and Sherwin Williams (SHW)—also posted strong results in 2023, a stark reversal from the prior year. After oil prices spiked above $100 in 2022 due to the Ukraine-Russia Conflict, oil has since pulled back to the low $70s. Oil and its by-products are major inputs for all of our Materials holdings; as such, lower oil prices have led to a rebound in profits. For example, our largest Materials holding—Ecolab—is expected to increase earnings more than 15% this year after declining 5% last year.”