Ecolab

Everything for a clean future

Without water, no life would exist on Earth. It truly is liquid gold, and we should definitely use it more sparingly. Here in Germany we undoubtedly live in abundance when it comes to water. We could certainly pay more attention to water consumption when taking long showers, brushing our teeth or washing the dishes. Unfortunately, water isn't an infinite resource.

And this is exactly where Ecolab comes into play. The US company, which sadly hardly anyone knows in this country, is one of the world's biggest water savers and water treaters. With its specialty cleaning products, Ecolab helps hotels, schools and restaurants, among others, save over 610 billion liters of water every year. Just the right investment for a sustainable portfolio, then.

The history and business model of Ecolab Inc.

In fact, we indirectly have automotive pioneer Henry Ford to thank for the fact that Ecolab exists today. Car salesman Merritt J. Osborn had to give up his business in 1923 because Henry Ford was putting on too much sales pressure. But since Osborn had a family to feed, he quickly came up with a different business model. Luckily, the hobby chemist knew a bit about chemicals, so he developed a cleaning product that allowed hotels to clean carpets right on site. Back then, the entire hotel otherwise had to be closed for a few days to do a thorough cleaning. Thanks to his product, hoteliers saved a lot of time, money and work. Osborn's business went brilliantly, and he was able to keep expanding it.

Today Ecolab is present in over 170 countries around the world and mainly sells ecological cleaning and disinfection products. With the acquisition of Nalco in 2011, Ecolab reached a major milestone. Because now Ecolab is also a sought-after expert in the oil and gas industry. Here it mostly takes care of supplying special chemicals and treating wastewater. In addition, Ecolab's research team brings almost 100 new products to market every year. So it's also very well positioned for the future.

What can we expect from Ecolab in the future?

Considering that water is an increasingly scarce resource, you can safely assume that Ecolab's business will keep going this well. The company's services will become more and more important and urgent. Even in past economically weaker times, Ecolabs kept generating revenue and thus delighted its shareholders.

What about the dividend?

Ecolab has paid a dividend since 1936. And since 1987 it has been raised consistently every year. Ecolab currently yields only 1.1%, but it has been raised by an average of 12% per year over the last few years. So the company can deservedly adorn itself with the title of Dividend Aristocrat.

Conclusion:
Ecolab, a boring company you'll hardly ever hear about in the news or read about in magazines, but nonetheless a wonderful investment. You rarely see such a straight stock chart that knows only one direction. The American company's dividend policy is right, too. With a long-term investment horizon, I'd buy in here even at the all-time high, because you'll probably wait in vain for a correction here ...