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Republic Services (RSG) Stock Up 14.3% Year to Date: Here's Why
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Shares of Republic Services, Inc. (RSG - Free Report) have gained 14.3% so far this year, outperforming the 11.7% surge of the Zacks S&P 500 composite.
Let’s delve into the factors that have contributed to the company’s outperformance.
Upbeat 2021 Guidance
Republic Services raised its full-year adjusted diluted EPS and adjusted free cash flow guidance.
Adjusted EPS is now expected between $3.74 and $3.79, compared with the prior-guided range of $3.65-$3.73. The Zacks Consensus Estimate of $3.79 meets the higher end of the updated guidance.
The company now expects to generate $1.35 billion to $1.40 billion of adjusted free cash flow compared with the prior guidance of $1.30 billion to $1.375 billion.
Consecutive Earnings Beat
Republic Services reported better-than-expected earnings performance in all four quarters of 2020, as well as in first-quarter 2021. The company’s bottom line continued to benefit from improvement in operational efficiency, growth in adjusted free cash flow, higher recycled commodity prices and lower fuel costs.
Notably, the company's average recycled-commodity price per ton sold in the first quarter was $133, reflecting a year-over-year increase of $57 per ton.
Operational Efficiency Moves
Republic Services remains focused on increasing its operational efficiency by shifting to compressed natural gas (“CNG”) collection vehicles and converting rear-loading trucks to automated-side loaders, which will 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 2020, almost 13% of the replacement vehicle purchases were CNG vehicles. Meanwhile, 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, 2020, Republic Services operated 38 CNG-fueling stations. All these factors make the company a solid investment proposition.
The long-term expected earnings per share (three to five years) growth rate for Equifax, Charles River and TransUnion is 14%, 15.5% and 20.9%, respectively.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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Republic Services (RSG) Stock Up 14.3% Year to Date: Here's Why
Shares of Republic Services, Inc. (RSG - Free Report) have gained 14.3% so far this year, outperforming the 11.7% surge of the Zacks S&P 500 composite.
Let’s delve into the factors that have contributed to the company’s outperformance.
Upbeat 2021 Guidance
Republic Services raised its full-year adjusted diluted EPS and adjusted free cash flow guidance.
Adjusted EPS is now expected between $3.74 and $3.79, compared with the prior-guided range of $3.65-$3.73. The Zacks Consensus Estimate of $3.79 meets the higher end of the updated guidance.
The company now expects to generate $1.35 billion to $1.40 billion of adjusted free cash flow compared with the prior guidance of $1.30 billion to $1.375 billion.
Consecutive Earnings Beat
Republic Services reported better-than-expected earnings performance in all four quarters of 2020, as well as in first-quarter 2021. The company’s bottom line continued to benefit from improvement in operational efficiency, growth in adjusted free cash flow, higher recycled commodity prices and lower fuel costs.
Notably, the company's average recycled-commodity price per ton sold in the first quarter was $133, reflecting a year-over-year increase of $57 per ton.
Operational Efficiency Moves
Republic Services remains focused on increasing its operational efficiency by shifting to compressed natural gas (“CNG”) collection vehicles and converting rear-loading trucks to automated-side loaders, which will 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 2020, almost 13% of the replacement vehicle purchases were CNG vehicles. Meanwhile, 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, 2020, Republic Services operated 38 CNG-fueling stations. All these factors make the company a solid investment proposition.
Zacks Rank and Stocks to Consider
Republic Services currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Equifax (EFX - Free Report) , Charles River (CRAI - Free Report) and TransUnion (TRU - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for Equifax, Charles River and TransUnion is 14%, 15.5% and 20.9%, respectively.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>