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Will the Bull Run Continue for the Waste Removal Industry?

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Talking pre-pandemic, clean-up companies have generated stable revenues and cash flows from customers across diverse industries and paid out stable dividends, making waste management stocks robust defensive players.

The industry usually stays in a competent shape, with stocks offering decent returns with low volatility, the obvious reason being that waste production is a non-stop process and related services cannot be delayed.

Impact of Pandemic Muted

As the economy grappled with the pandemic’s blow and most of the business operations came to a near standstill, waste production from industrial and commercial sectors declined drastically, sending waste management companies far down their full-scale capacities.

This decline was, however, partially offset by the increase in municipal waste from residential areas and also those from medical centers. And with the gradual reopening of the economy and resumption of business activities, the industry has been gathering steam lately.

The Zacks Waste Removal Services industry has rallied 8.4% over the past six months.

How Will 2021 Shape Up for Clean-Up Companies?

The waste management industry is a beneficiary of economic health and it goes without saying that the only hope for improvement of the U.S. economic health is a successful mass vaccination which is yet to commence.

Increase in population, industrialization and urbanization will remain key drivers of the industry as it prompts significant rise in garbage and recycling. Also, technology adoption, and use of advanced collection and recycling solutions is expected to pick up pace.

Additionally, increasing awareness regarding renewable waste management systems, concerns regarding rise in CO2 emissions, and the U.S. government’s push for sustainable waste management mechanisms and putting a check on illegal dumping will spur demand for waste management services.

The Zacks Waste Removal Services currently carries a Zacks Industry Rank (the average of the Zacks Rank of all the member stocks) of 118, which places it in the top 47% of more than 250 Zacks industries. This indicates solid near-term growth prospects.

Stocks That Deserve to be in Your Radar

Over the past six months, the stock prices of six major clean-up companies have had an impressive run on the bourse. Aqua Metals (AQMS - Free Report) , GFL Environmental (GFL - Free Report) and Clean Harbors (CLH - Free Report) have appreciated 235.1%, 51.6% and 41.1%, respectively. Stericycle (SRCL - Free Report) , Republic Services (RSG - Free Report) and Waste Management (WM - Free Report) have rallied a respective 16.7%, 10.3% and 7.6%.

Clean Harbors is a Zacks Rank #1 (Strong Buy) company, currently. Others mentioned above are also considerable for your portfolio as all these firms carry a Zacks Rank #3 (Hold), at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows a comparison of the price performance of six major waste removal stocks with the industry and the S&P 500 composite in the past six months.

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.

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