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Covanta Holding's Systematic Capital Investments Bode Well
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Covanta Holding’s building and commercialization of new technology, execution of systematic capital expenditure and development of a total ash processing system to reduce the long-term costs of ash disposal are key tailwinds.
The company has a trailing four-quarter earnings surprise of 54.21%, on average.
What’s Driving the Stock?
Over the past several years, Covanta Holding has been investing substantially in the purchase of property, plant and equipment to enhance its infrastructure and serve its customers efficiently. The investments will enable the company to increase safety and reliability of its Energy-from-Waste projects, provide solutions for replacing the aging infrastructureas well as for solid waste and recyclable households plus various hazardous wastes.
During the first half of 2020, the majority of waste and service revenues were related to residential waste generation, which were unaffected by the pandemic. Moreover, to strengthen and enhance its existing operations, the company is commercializing new technologies like recycling of wastes, innovating alternative waste treatment processes, effecting combustion and emission controls as well as recycling, reusing or disposing the waste.
Further, to minimize its long-term ash disposal expense and maintain more sustainability while creating new revenue-earning opportunities, the company has been developing its first total ash processing system.
Moreover, in 2019, it invested $56 million in different growth projects. It aims to pump $25-$30 million into different endeavors during 2020 to expand its current activities. This includes $10-$15 million investments in consolidating international business.
Woes
Higher plant-operating expenses, stringent laws and regulations in the United States and rising debt levels are headwinds.
Price Performance
Shares of Covanta Holding have gained 6% in the past three months, marginally outperforming the industry’s rise of 5.9%.
Stocks to Consider
A few better-ranked stocks from the same sector are Bloom Energy Corporation (BE - Free Report) , Linde plc (LIN - Free Report) and Holly Energy Partners, L.P. , all carrying a Zacks Rank #2 (Buy) at present.
Bloom Energy has a long-term (three-five years) earnings growth rate of 25%. The company delivered an earnings surprise of 13.24%, on average, in the last four quarters.
Linde delivered an earnings surprise of 7.54%, on average, in the preceding four quarters. The company has a long-term earnings growth rate of 11%.
The Zacks Consensus Estimate for Holly Energy Partners’ 2020 earnings has been revised 10.1% upward over the past 60 days. The company delivered an earnings surprise of 22.78%, on average, in the trailing four quarters.
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Covanta Holding's Systematic Capital Investments Bode Well
Covanta Holding’s building and commercialization of new technology, execution of systematic capital expenditure and development of a total ash processing system to reduce the long-term costs of ash disposal are key tailwinds.
We recently issued an updated research report on this currently Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company has a trailing four-quarter earnings surprise of 54.21%, on average.
What’s Driving the Stock?
Over the past several years, Covanta Holding has been investing substantially in the purchase of property, plant and equipment to enhance its infrastructure and serve its customers efficiently. The investments will enable the company to increase safety and reliability of its Energy-from-Waste projects, provide solutions for replacing the aging infrastructureas well as for solid waste and recyclable households plus various hazardous wastes.
During the first half of 2020, the majority of waste and service revenues were related to residential waste generation, which were unaffected by the pandemic. Moreover, to strengthen and enhance its existing operations, the company is commercializing new technologies like recycling of wastes, innovating alternative waste treatment processes, effecting combustion and emission controls as well as recycling, reusing or disposing the waste.
Further, to minimize its long-term ash disposal expense and maintain more sustainability while creating new revenue-earning opportunities, the company has been developing its first total ash processing system.
Moreover, in 2019, it invested $56 million in different growth projects. It aims to pump $25-$30 million into different endeavors during 2020 to expand its current activities. This includes $10-$15 million investments in consolidating international business.
Woes
Higher plant-operating expenses, stringent laws and regulations in the United States and rising debt levels are headwinds.
Price Performance
Shares of Covanta Holding have gained 6% in the past three months, marginally outperforming the industry’s rise of 5.9%.
Stocks to Consider
A few better-ranked stocks from the same sector are Bloom Energy Corporation (BE - Free Report) , Linde plc (LIN - Free Report) and Holly Energy Partners, L.P. , all carrying a Zacks Rank #2 (Buy) at present.
Bloom Energy has a long-term (three-five years) earnings growth rate of 25%. The company delivered an earnings surprise of 13.24%, on average, in the last four quarters.
Linde delivered an earnings surprise of 7.54%, on average, in the preceding four quarters. The company has a long-term earnings growth rate of 11%.
The Zacks Consensus Estimate for Holly Energy Partners’ 2020 earnings has been revised 10.1% upward over the past 60 days. The company delivered an earnings surprise of 22.78%, on average, in the trailing four quarters.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q2 2020, while the S&P 500 gained an impressive +44.0%, five of our strategies returned +50.9%, +93.8%, +122.2%, +153.0%, and even +156.8%.
This outperformance has not just been a recent phenomenon. From 2000 – Q2 2020, while the S&P averaged +5.5% per year, our top strategies averaged up to +51.7% per year.
See their latest picks free >>