Sanitation is an attractive business for two reasons: it's absolutely critical, and it's relatively cheap. In other words, Ecolab's customers care a whole lot more about being sanitary (and avoiding the plethora of downside attached to a dirty restaurant or hospital) than they do about the minimal costs that high-quality cleaning supplies tack onto their income statements.
ECL is yet another stock with a lot riding on revenues abroad. There's considerable room for Ecolab to expand internationally, particularly in emerging economies, where sanitation mandates are only just starting to catch up with Ecolab's existing markets. If the company can spend the resources on growing its sales and distribution base internationally, that investment should pay off considerably in the next several years.The company's 20-cent dividend marks a 1.2% yield, a payout level that's well below ECL's average yield on a historic basis. That leaves room for a dividend hike in 2012.