Is Ecolab Really This Expensive?

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Ecolab has gone from having a relatively affordable price-to-earnings ratio at the beginning of the year to being a far more expensive company today. The biggest reason has been the large acquisition of Nalco, which isn't being fully represented in Ecolab's earnings at the moment. Despite what looks like an expensive company on paper, Ecolab's underlying business is actually fairly priced for its growth, though it may never be fully reflected that way due to its growth-through-acquisitions approach.

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Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Ecolab, and Waste Management. Motley Fool newsletter services recommend Amazon.com and Waste Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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