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5 Reasons Why You Should Invest in Republic Services Stock

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Republic Services, Inc. (RSG - Free Report) has performed extremely well lately and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Republic Services an Attractive Pick?

An Outperformer : A glimpse at this waste-removal services provider’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Republic Services have returned 2.3% against the industry’s decline of 15%.

 

Solid Zacks Rank: Republic Services has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can seethe complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 60 days, the Zacks Consensus Estimate for Republic Services’ current-quarter earnings has increased 17.1% to 82 cents per share. Estimates for 2020 and 2021 have moved up 14.1% and 9.7%, respectively.

Earnings-Surprise History: Republic Services has an impressive earnings-surprise history. The company has a trailing four-quarter earnings surprise of 11.8%, on average.

Growth Factors

Republic Services is focused on increasing its operational efficiency by shifting to compressed natural gas (“CNG”) collection vehicles and converting rear-loading trucks to automatedside loaders to reduce cost and improve profitability. The company is focused on enhancing its operations by streamlining the cost structure, improving revenue quality and seeking growth through profitable investment opportunities. In 2019, almost 13% of the replacement-vehicle purchases were CNG vehicles. The company is highly optimistic about the usage of CNG vehicles, which will help it compete effectively on grounds of maintaining a clean environment. Despite higher expenses, CNG reduces the company’s overall fleet-operating costs through lower fuel expenses. As of Dec 31, 2019, Republic Services operated 39 CNG-fueling stations. All these factors offer a solid investment proposition for the company.

We are impressed with Republic Services’ consistent efforts in rewarding its shareholders through dividend payments and share repurchases. In 2019, 2018 and 2017, the company paid out $491.2 million, $461.8 million and $440.5 million in dividends 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 underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact earnings per share.

Zacks Rank and Other Stocks to Consider

Republic Services currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are IQVIA Holdings (IQV - Free Report) , ICF International (ICFI - Free Report) and CoreLogic , each carrying a Zacks Rank #2. 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 IQVIA Holdings, ICF International and CoreLogic is 9.8%, 10% and 12%, respectively.

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Republic Services, Inc. (RSG) - free report >>

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