We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Republic Services (RSG) Up 21.2% in Past 6 Months: Here's Why
Read MoreHide Full Article
Shares of Republic Services, Inc. (RSG - Free Report) have gained 21.2% over the past six months, outperforming the14.6% growth of the industry it belongs to.
Let’s delve deeper into factors which have contributed to the company’s outperformance.
Consecutive Earnings Beat
Republic Services reported better-than-expected earnings performance in all four quarters of 2019 and the first three quarters of 2020. The company’s bottom line continued to benefit from improvement in operational efficiency, growth in adjusted free cash flow, higher recycled commodity prices and lower fuel costs.
Notably, the company's average recycled commodity price per ton sold in the third quarter of 2020 was $99, reflecting year-over-year increase of $27 per ton.
Raised 2020 Cash Flow Guidance
Republic Services raised its full-year 2020 cash flow guidance. The company now anticipates generating $1.15 billion to $1.20 billion of adjusted free cash flow for the full year compared with the prior guidance of $1.1-$1.175 billion. This guidance assumes continued gradual improvement in economic activity through the remainder of the year.
It also plans to invest $850-$900 million in acquisitions for the full year.
However, the company has reaffirmed its 2020 adjusted EPS guidance. Adjusted EPS is expected to be in the range of $3.37-$3.40. The Zacks Consensus Estimate of $3.38 lies within the guidance.
Shareholder Friendly Moves
Republic Services’ consistent efforts in rewarding its shareholders through dividend payments and share repurchases are appreciable. During the first nine months of 2020, Republic Services paid out $387.1 million in dividends. Further, the company’s board of directors declared a regular quarterly dividend of 42.5 cents per share for shareholders on record as of Jan 4, 2021. The dividend will be paid out on Jan 15, 2021.
Concurrent with the third-quarter 2020 earnings release, the company’s board of directors approved $2 billion for share repurchases, effective from Jan 1, 2021 till Dec 31, 2023. As of Sep 30, 2020, the company had $606 million available under its prior authorizationand this continues till Dec 31, 2020.
In 2019, 2018 and 2017, the company paid out $491.2 million, $461.8 million and $440.5 million in dividends respectively, and repurchased shares worth $399.4 million, $736.9 million and $610.7 million, respectively. Such moves indicate the company’s commitment to create value for shareholders and also underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact earnings per share.
Zacks Rank and Stocks to Consider
Republic Services currently carries a Zacks Rank #3 (Hold).
The long-term expected earnings per share (three to five years) growth rate for Automatic Data Processing, Insperity and BG Staffing is 10%, 12% and 20%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Republic Services (RSG) Up 21.2% in Past 6 Months: Here's Why
Shares of Republic Services, Inc. (RSG - Free Report) have gained 21.2% over the past six months, outperforming the14.6% growth of the industry it belongs to.
Let’s delve deeper into factors which have contributed to the company’s outperformance.
Consecutive Earnings Beat
Republic Services reported better-than-expected earnings performance in all four quarters of 2019 and the first three quarters of 2020. The company’s bottom line continued to benefit from improvement in operational efficiency, growth in adjusted free cash flow, higher recycled commodity prices and lower fuel costs.
Notably, the company's average recycled commodity price per ton sold in the third quarter of 2020 was $99, reflecting year-over-year increase of $27 per ton.
Raised 2020 Cash Flow Guidance
Republic Services raised its full-year 2020 cash flow guidance. The company now anticipates generating $1.15 billion to $1.20 billion of adjusted free cash flow for the full year compared with the prior guidance of $1.1-$1.175 billion. This guidance assumes continued gradual improvement in economic activity through the remainder of the year.
It also plans to invest $850-$900 million in acquisitions for the full year.
However, the company has reaffirmed its 2020 adjusted EPS guidance. Adjusted EPS is expected to be in the range of $3.37-$3.40. The Zacks Consensus Estimate of $3.38 lies within the guidance.
Shareholder Friendly Moves
Republic Services’ consistent efforts in rewarding its shareholders through dividend payments and share repurchases are appreciable. During the first nine months of 2020, Republic Services paid out $387.1 million in dividends. Further, the company’s board of directors declared a regular quarterly dividend of 42.5 cents per share for shareholders on record as of Jan 4, 2021. The dividend will be paid out on Jan 15, 2021.
Concurrent with the third-quarter 2020 earnings release, the company’s board of directors approved $2 billion for share repurchases, effective from Jan 1, 2021 till Dec 31, 2023. As of Sep 30, 2020, the company had $606 million available under its prior authorizationand this continues till Dec 31, 2020.
In 2019, 2018 and 2017, the company paid out $491.2 million, $461.8 million and $440.5 million in dividends respectively, and repurchased shares worth $399.4 million, $736.9 million and $610.7 million, respectively. Such moves indicate the company’s commitment to create value for shareholders and also underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact earnings per share.
Zacks Rank and Stocks to Consider
Republic Services currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Automatic Data Processing (ADP - Free Report) , Insperity (NSP - Free Report) and BG Staffing (BGSF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for Automatic Data Processing, Insperity and BG Staffing is 10%, 12% and 20%, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>