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Time to Buy These 3 Stocks From an Upbeat Waste Removal Sector

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The Waste Management industry is experiencing positive trends due to a rise in government regulations, the integration of advanced technologies, and a growing awareness of environmental concerns. The sector is capitalizing on increased industrialization and urbanization, coupled with a greater emphasis on improved waste management practices. Per Statista, the global waste management sector is expected to register a compound annual growth rate (CAGR) of 5.4% from 2023 to 2030. The driving forces behind this expansion are expected to be improved waste collection methods and the escalating volumes of waste in emerging markets.

Waste Connections, Inc. (WCN - Free Report) , Core & Main, Inc. (CNM - Free Report) and Stericycle, Inc. (SRCL - Free Report) are some stocks likely to gain from the abovementioned factors.

Industry Description

Companies within the Zacks Waste Removal Services industry play a vital role in the collection, treatment and responsible management of diverse waste types, aiming to minimize their impact on both the environment and public health. This market is categorized into distinct segments based on the type of waste, including Industrial, Commercial, Domestic and Agricultural waste. The Industrial waste segment has gained significance due to the ongoing industrial expansion, creating a substantial demand for efficient waste management solutions. The market encompasses Collection and Disposal services. The Disposal services segment, primarily fueled by the growing need for waste recycling, stands as the primary revenue-generating catagory.

Factors Influencing the Future of Waste Removal Services Industry

Reviving Demand: The industry is mature, with demand for services remaining stable over time. Revenues, income and cash flows are anticipated to gradually reach the pre-pandemic healthy levels, aiding most industry players in paying out stable dividends.

Rising importance of environmental, social and governance (ESG) goals: Waste management is a cornerstone of ESG principles, as it allows companies to enhance their ESG ratings by promoting environmental sustainability, fostering social well-being and upholding good governance. Embracing responsible waste management not only meets legal requirements but also aligns with consumer and investor desires for sustainable and ethical business practices. In the modern landscape, waste management is not merely a duty but a chance for businesses to showcase their dedication to ESG values, which underpin lasting success and resilience.

Technology bolsters the growth of the waste management industry: Technology has become a crucial ally in waste management, addressing the challenges of waste generation and environmental impact. This transformative correlation promises a more sustainable future. Advancing technology empowers more efficient, eco-friendly waste management, reducing the ecological footprint and promoting sustainability. In a world grappling with waste challenges, technology leads us toward responsible waste management and a cleaner planet.

Zacks Industry Rank Indicates Encouraging Prospects

The Zacks Waste Removal Services industry, which is housed within the Zacks Business Services sector, currently carries a Zacks Industry Rank #103. This rank places it in the top 41% of 251 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Before we present a few stocks that investors can buy or retain, given their sturdy potential, let’s take a look at the industry’s recent stock market performance and current valuation.

Industry Outperforms Sector but Lags S&P 500

The Zacks Waste Removal Services industry has outperformed the Zacks S&P 500 composite and the broader Zacks Business Services sector over the past year.

The industry has gained 22.8% over this period, outperforming the 22.7% upside of the Zacks S&P 500 composite and the 19.9% increase in the broader sector.

One-Year Price Performance

Industry's Current Valuation

On the basis of EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation and amortization), which is commonly used for valuing Waste Removal services stocks, the industry is currently trading at 12.54X compared with the S&P 500’s 14.63X and the sector’s 28.16X.

Over the past year, the industry has traded as high as 13X and as low as 10.66X, with a median of 11.43X, as the charts below show.


3 Stocks to Consider

Let's discuss three stocks that are expected to benefit from the favorable industry conditions.

Core & Main: The company is a U.S.-based distributor of water, wastewater, storm drainage, and fire protection products and services, catering to municipalities, private water companies and professional contractors. Their comprehensive product range includes pipes, valves, hydrants, fittings, storm drainage solutions, fire protection systems, sprinkler devices and meter products, including smart meters and associated services.

The growing emphasis on infrastructure development and modernization in the United States bodes well for the company. This trend drives demand for water, wastewater, storm drainage, and fire protection products and services, aligning with the company's offerings and positioning it for potential growth.

The company’s fiscal 2025 earnings are expected to grow 20.5% year over year to $2.59 per share. CNM’s EPS estimates have been revised northward by 5.3% in the past 60 days. Core & Main currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: CNM


Stericycle: The company specializesin providing services related to medical waste management and compliance solutions. SRCL is known for offering services that help healthcare facilities, businesses and other organizations properly handle and dispose of medical and biohazardous waste. This includes services such as collection, transportation, treatment and disposal of various types of medical waste to ensure compliance with regulatory standards.

SRCL’s 2024 earnings are expected to grow 22.2% from the year-ago reported figure to $2.31 per share. The company’s 2024 EPS estimates have been revised northward by 4.5% in the past 60 days. Stericycle carries a Zacks Rank of 2 (Buy) at present.

Price and Consensus: SRCL


Waste Connections: The company is a provider of non-hazardous waste collection, transfer, disposal, and resource recovery services. WCN’s low-overhead, highly efficient operational structure allows it to expand into geographically contiguous markets and operate in relatively small communities that other competitors may not find attractive.

SRCL’s 2024 earnings are expected to grow 15.8% from the year-ago reported figure to $4.85 per share. The company’s 2024 EPS estimates have been revised northward by 0.8% in the past 60 days. Waste Connections carries a Zacks Rank of 2 at present.

Price and Consensus: WCN

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Stericycle, Inc. (SRCL) - free report >>

Waste Connections, Inc. (WCN) - free report >>

Core & Main, Inc. (CNM) - free report >>

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