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Waste Removal Services Industry Outlook Sparkling Bright
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Companies in the Zacks Waste Removal Services industry are engaged in the collection, transportation, treatment, disposal, inspection and regulation of any form of waste. The companies serve residential, municipal, commercial and industrial customers in the United States and internationally.
Here are the industry’s three major themes:
The industry is mature and banks on volume and price increases. Income and cash flow have grown steadily over the past few years, enabling most industry players to pursue acquisitions and other investments. Per a recent report, the global waste management market is expected to exceed $643 billion, at a CAGR of 7.9% from 2017 to 2026.
Rising environmental concerns, rapid industrialization, increase in population and an expected increase in non-hazardous waste as a result of rapid economic growth should enhance business opportunities for waste management companies. Growing adoption of recycling techniques, development of technologies and advanced waste collection solutions are key trends within the industry. Recycling remains a major growth area, with most industry players undertaking municipal solid waste and non-hazardous industrial waste recycling measures.
Government initiatives as well as stringent rules and regulations to advance sustainable waste management mechanisms, reduce greenhouse gas emissions and put a check on illegal dumping are also expected to boost the industry.The Environmental Protection Agency’s Resource Conservation and Recovery Act, aimed at reducing open dumping and managing hazardous and non-hazardous waste, will significantly benefit the industry.
Zacks Industry Rank Indicates Encouraging Prospects
The Zacks Waste Removal Services industry, which is housed within the broader Zacks Business Services sector, currently carries a Zacks Industry Rank #85. This rank places it in the top 33% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can buy or retain given their growth prospects, let’s take a look at the industry’s recent stock market performance and current valuation.
Industry’s Price Performance
The Zacks Waste Removal Services Industry has underperformed the broader Zacks Business Services sector but outperformed the Zacks S&P 500 composite over the past year.
The industry has risen 13.3% over this period compared with 14.3% gain of the broader sector and 12.5% rise of the Zacks S&P 500 composite.
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 because of their high debt levels, the industry is currently trading at 10.68X compared with the S&P 500’s 11.23X and the sector’s 11.14X.
Over the past five years, the industry has traded as high as 12.18X, as low as 8.64X and at the median of 10.09X, as the charts below show.
EV/EBITDA Ratio
Bottom Line
Increasing environmental awareness, rising population, rapid industrialization and urbanization and growing adoption of advanced waste collection solutions should continue to drive demand. Government initiatives toward sustainable waste management should open up incremental opportunities.
We now discuss four stocks from the Zacks Waste Removal Services universe, with the first one sporting a Zacks Rank #1 (Strong Buy) and the rest carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Disposal Services : This Florida-based company provides non-hazardous solid waste collection, transfer, recycling, and disposal services.
The Zacks Consensus Estimate for current-year EPS has moved up 7.5% in the past 60 days.
Price and Consensus: ADSW
Republic Services, Inc. (RSG - Free Report) : This Arizona-based company provides non-hazardous solid waste collection, transfer, recycling, disposal, and energy services for small-container, large-container, municipal and residential, and energy services customers in the United States and Puerto Rico.
The Zacks Consensus Estimate for its current-year EPS has improved 1.2% in the past 60 days.
Price and Consensus: RSG
Stericycle, Inc. (SRCL - Free Report) : This Illinois-based company provides regulated and compliance solutions to the healthcare, retail, and commercial businesses in the United States and internationally.
The Zacks Consensus Estimate for its current-year EPS has climbed 1.2% in the past 60 days.
Price and Consensus: SRCL
Waste Management, Inc. (WM - Free Report) : This Texas-based company provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America.
The Zacks Consensus Estimate for its current-year EPS has increased 0.5% in the past 60 days.
Price and Consensus: WM
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Image: Bigstock
Waste Removal Services Industry Outlook Sparkling Bright
Companies in the Zacks Waste Removal Services industry are engaged in the collection, transportation, treatment, disposal, inspection and regulation of any form of waste. The companies serve residential, municipal, commercial and industrial customers in the United States and internationally.
Here are the industry’s three major themes:
Zacks Industry Rank Indicates Encouraging Prospects
The Zacks Waste Removal Services industry, which is housed within the broader Zacks Business Services sector, currently carries a Zacks Industry Rank #85. This rank places it in the top 33% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term growth prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that investors can buy or retain given their growth prospects, let’s take a look at the industry’s recent stock market performance and current valuation.
Industry’s Price Performance
The Zacks Waste Removal Services Industry has underperformed the broader Zacks Business Services sector but outperformed the Zacks S&P 500 composite over the past year.
The industry has risen 13.3% over this period compared with 14.3% gain of the broader sector and 12.5% rise of the Zacks S&P 500 composite.
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 because of their high debt levels, the industry is currently trading at 10.68X compared with the S&P 500’s 11.23X and the sector’s 11.14X.
Over the past five years, the industry has traded as high as 12.18X, as low as 8.64X and at the median of 10.09X, as the charts below show.
EV/EBITDA Ratio
Bottom Line
Increasing environmental awareness, rising population, rapid industrialization and urbanization and growing adoption of advanced waste collection solutions should continue to drive demand. Government initiatives toward sustainable waste management should open up incremental opportunities.
We now discuss four stocks from the Zacks Waste Removal Services universe, with the first one sporting a Zacks Rank #1 (Strong Buy) and the rest carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Advanced Disposal Services : This Florida-based company provides non-hazardous solid waste collection, transfer, recycling, and disposal services.
The Zacks Consensus Estimate for current-year EPS has moved up 7.5% in the past 60 days.
Price and Consensus: ADSW
Republic Services, Inc. (RSG - Free Report) : This Arizona-based company provides non-hazardous solid waste collection, transfer, recycling, disposal, and energy services for small-container, large-container, municipal and residential, and energy services customers in the United States and Puerto Rico.
The Zacks Consensus Estimate for its current-year EPS has improved 1.2% in the past 60 days.
Price and Consensus: RSG
Stericycle, Inc. (SRCL - Free Report) : This Illinois-based company provides regulated and compliance solutions to the healthcare, retail, and commercial businesses in the United States and internationally.
The Zacks Consensus Estimate for its current-year EPS has climbed 1.2% in the past 60 days.
Price and Consensus: SRCL
Waste Management, Inc. (WM - Free Report) : This Texas-based company provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America.
The Zacks Consensus Estimate for its current-year EPS has increased 0.5% in the past 60 days.
Price and Consensus: WM
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>