We recently published a list of the 15 Low Profile Dividend Champions to Buy. In this article, we are going to take a look at where Ecolab Inc. (NYSE:ECL) stands against other low profile dividend champions.

Companies known as Dividend Aristocrats belong to the S&P Index and have raised their dividend payments every year for a minimum of 25 years. On the other hand, Dividend Champions have also maintained at least 25 straight years of dividend growth, though they may not be part of the broader market.

It is possible to pursue a strategy that offers both income and growth. Companies that regularly increase their dividends—often referred to as dividend growers—are typically financially sound, well-managed, and of high quality. Over the long term, these businesses not only show lower levels of volatility but also tend to deliver better performance than the broader market, such as the S&P Equal Weight Index. According to a report by Guggenheim, companies that grew and initiated their dividends between May 2005 and December 2024 delivered an annual average return of 10.5%, compared with a 5.5% return of those companies that cut or eliminated their payouts during this period. The broader market produced a 10.4% return on an annual average basis, slightly underperforming the dividend growers.

The report also mentioned that dividend growth strategies have generally shown strong performance in both rising and falling markets. For investors, this offers a chance to benefit from long-term market gains while also helping to preserve more value during inevitable market downturns.

Dividend-paying stocks provided investors with a degree of stability during the volatile month of March, according to Bank of America, which highlighted several standout names during the market’s rough patch. The firm noted that value and dividend-focused stocks performed well that month, as concerns over President Donald Trump’s tariff policies unsettled the broader market. The firm’s quant strategist, Nigel Tupper, said the following in an April 11 report.

“In March, as global equities fell -4.1% on concerns tariffs could increase and slow growth, the best performing global styles were Value and Dividends,”

With investor demand for dividend stocks on the rise, many companies have been steadily increasing their payouts. A report from Janus Henderson revealed that global dividend payments reached an all-time high of $1.75 trillion in 2024, reflecting a 6.6% increase on an underlying basis. The overall headline growth was 5.2%, influenced by fewer one-off special dividends and a stronger US dollar. Out of 49 countries in the index, 17— including major contributors like the US, Canada, France, Japan, and China—set new records for dividend payments. Overall, 88% of companies worldwide either raised their dividends or maintained them throughout the year. Looking ahead, Janus Henderson forecasts that global dividends will rise by 5.0% on a headline basis in the coming year, reaching a new record of $1.83 trillion. Although the stronger US dollar is expected to weigh on headline growth, the underlying growth rate is projected to come in slightly higher, around 5.1%.

A technician wearing a protective suit in a water treatment plant.

Our Methodology:

For this article, we scanned a list of Dividend Champions, which are companies that have raised their payouts for 25 consecutive years or more. From that list, we picked some lesser-known companies with sound financials and strong balance sheets and ranked them according to hedge funds having stakes in them, as per Insider Monkey’s database of Q4 2024.

At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Ecolab Inc. (NYSE:ECL)

Number of Hedge Fund Holders: 59

Ecolab Inc. (NYSE:ECL) is an American company that specializes in water treatment and cleaning solutions. Known for its commitment to sustainability and innovation, the company helps clients reduce their environmental impact while improving operational efficiency. Its product offerings cover areas such as water and energy management, infection control, and other solutions focused on boosting efficiency.

For the fourth quarter of 2024, Ecolab Inc. (NYSE:ECL) reported $4 billion in revenue, reflecting a nearly 2% year-over-year growth. Organic sales rose by 4%, driven by stronger growth in its Industrial and Healthcare & Life Sciences segments, as well as continued solid performance in Pest Elimination and Institutional & Specialty divisions. Regionally, the U.S. led with strong organic sales growth, while international markets also posted positive results, with new business gains helping to offset the impact of varying macroeconomic conditions. The company’s operating income margin stood at 14.6%.

In FY24, Ecolab Inc. (NYSE:ECL) showcased a robust cash position, with operating cash flow reaching $2.8 billion and free cash flow totaling $1.8 billion. This strong cash flow enabled the company to increase its dividends for 33 consecutive years, making it one of the top dividend stocks favored by billionaires. The company offers a quarterly dividend of $0.65 per share and has a dividend yield of 1.09%, as recorded on April 17.

Overall, ECL ranks 1st on our list of low profile Dividend Champions to invest in. While we acknowledge the potential of ECL as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than ECL but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.