ECL
Ecolab
Dividend / Cash flow
★ Quality 46/100Price today
$279.28
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What this business is made of
The business
Ecolab is the anti-contamination insurance no manager dares to cancel.
Ecolab sells water, hygiene, and infection prevention to hotels, hospitals, food plants, and factories. It doesn't sell loose chemicals: it sells the whole system —dispensers, sensors, on-site technical service— and charges to keep your operation clean and your water optimized. $16.1B in revenue in 2025, gross margins of 44%.
The moat is switching costs, not the chemistry. Its teams live inside the client's facilities, calibrating doses and auditing consumption. Switching providers means risking contamination or a health shutdown to save pennies. Nobody does it. That explains the retention, but it's not an impenetrable moat: there are serious competitors.
Revenue history
From $12.7B to $16.1B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $16.1B · FY2025
Of every $100 in sales, $87 goes to costs and operations; $13 is left as net profit (13% margin).
Catalysts and risks
Water business growing double digits; goal to double the division's sales by 2030.
Margin expansion: prices indexed to inflation with input costs normalizing since 2023.
Normalized FCF of $7.99 per share supports growing dividends —33 consecutive years of increases.
Debt of $7.4B against just $0.6B in cash: little room if rates rise or FCF falls.
Cyclical demand in industrial and manufacturing; a recession hits volumes directly.
Intrinsic value $109.95 leaves a slim MoS (margin of safety) at the current price; you pay for quality, not for a discount.
Charlie's note
“A good, boring business that charges a toll to keep you clean. The problem isn't the company, it's the price: buying quality with no discount limits your future return. I'd wait for the market to have a bad day.”
Analysis · June 2026
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