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Ecolab to Serve Universiade Games

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Leading cleaning and sanitation products maker, Ecolab (ECL) has been selected as the official hygiene supplier for the 2013 Universiade Games. Ecolab will provide its leading products and on-site services to local partners at the event.

Ecolab will be serving more than 100,000 athletes, volunteers and spectators visiting Kazan, Russia for this event. The partnership with Universiade Games will boost Ecolab’s brand name and help enhance its top line considerably.

The Minn.-based company reported revenue growth of 2% in the first quarter of 2013. The Zacks Consensus Estimate for 2013 revenues is pegged at $13,482 million, which represents a 14% hike over 2012 revenues.

Ecolab serves the foodservice, food and beverage processing, healthcare and hospitality markets across the globe. We are impressed by Ecolab’s consistent double-digit earnings growth despite the current challenging business environment. The company remains focused on introducing new technologies into the market.

Based on its history of robust growth, Ecolab is poised to gain momentum via its aggressive strategy of pursuing acquisitions. Ecolab acquired Champion Technologies to become a giant in the oilfield chemical business and reduce competition for its Nalco subsidiary.

Though multiple acquisitions have expanded Ecolab’s product range, we remain concerned about the acquisition and integration-related risks. Difficult economic trends, currency fluctuations, higher raw material prices, product delivery costs and pension costs also remain headwinds.

Ecolab currently has a Zacks Rank #3 (Hold). Other companies from the basic materials industry such as OM Group (OMG), KapStone Paper and Packaging (KS) and Westlake Chemical (WLK) warrant a look. All these stocks carry Zacks Rank #1 (Strong Buy)

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