Is Ecolab Stock a Buy?
Food safety, hygiene, and clean water company Ecolab (NYSE: ECL) continues to be a stock keenly contested by bulls and bears. On the one hand, it's a great business with a high degree of recurring revenue, and it obviously has lines of businesses that will benefit from increasing public awareness around the need for clean environments. On the other hand, some of its key end markets will remain challenged for some time. Let's take a look at what's going on.
The key issue for Ecolab right now is its exposure to the hard-hit restaurant and hospitality industries. In the third quarter, the company reported dramatic year-over-year declines in sales and income from its institutional segment, which covers those sectors.
Turning to Ecolab's industrial segment, revenues still declined in Q3, but operating income rose strongly on the back of pricing increases and cost cuts. Its industrial-based sales are likely to improve as sites open up again, albeit with near-term weakness as the current intense wave of COVID-19 hits the global economy.
Source Fool.com
