When most people think of Ecolab (ECL), visions of cleaning supplies and urinal cakes dance in their head. That’s because ECL is the largest provider of sanitizing programs for restaurants, hospitals and other businesses in the country.
However, it’s also becoming a monster in the world of energy.
Back in 2011, ECL made a huge $5.4 billion purchase of water treatment firm Nalco, the leading water treatment firm for oil and gas companies. Fracking a well takes millions of gallons of water to perform. That H2O needs to be cleaned and treated before it can returned to aquifers. This purchase — along with last fall’s $2.2 billion buy of Champion Technologies — has now made ECL a huge player in oilfield water/chemical treatment.
That newly dominant position in the energy sector is providing plenty of growth for ECL stock. Ecolab recently upped its dividend by 20% on the back of rising revenues for its oil field products.
For ECL stock investors, paper towel and soap sales can provide a nice cushion, while the energy assets should provide plenty of growth in the future.