For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Republic Services (
RSG Quick Quote RSG - Free Report) ten years ago? It may not have been easy to hold on to RSG for all that time, but if you did, how much would your investment be worth today? Republic Services' Business In-Depth
With that in mind, let's take a look at Republic Services' main business drivers.
Republic Services is the second largest provider of non-hazardous solid waste collection, transfer, disposal, recycling, and energy services in the United States. As of Dec 31, 2020, the company operated facilities in 41 states and Puerto Rico through 345 collection operations, 220 transfer stations, 186 active landfills, 76 recycling processing centers, seven treatment, recovery and disposal facilities, 9 salt water disposal wells. The company is engaged in 75 landfill gas-to-energy and renewable energy projects and had post-closure responsibility for 128 closed landfills. The was incorporated in Delaware in 1996.
The company generates revenues mainly from its solid waste collection operations. The remaining revenue comes from other services, which includes transfer station, landfill disposal, recycling, and energy services. Collection Services unit (75% of 2020 revenues) provides commercial, residential, industrial and other services. Residential collection operations are performed under contracts with municipalities and include collection of refuse from containers into collection vehicles and dumped to transfer stations or landfills. On the commercial and industrial side, the company supplies its customers with waste containers and rents compactors to large waste generators. Transfer Services unit (6%) deposits waste at its transfer stations.Transfer stations provide collection operations in a cost effective manner to consolidate waste and reduce transportation costs. Revenues are generated by charging extras or disposal fees. The company owns or operates 207 transfer stations. Landfill Services revenues (13%) are generated from tipping fees charged to third parties. Landfill unit undertakes highly-engineered systems with several layers of environmental protection to increase their overall energy output. The company owns or operates 190 active landfills. Recycling Services revenues (3%) are generated through the processing and sale of old corrugated containers (OCC), old newsprint (ONP), aluminum, glass and other materials. The company owns or operates 91 recycling processing centers. Environmental Services (2%) activity varies across market areas depending on the natural resource basins in which the drilling activity occurs and reflects the regulatory environment, pricing and disposal alternatives available in any given market. Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Republic Services ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in October 2011 would be worth $4,530.37, or a 353.04% gain, as of October 22, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 267.44% and the price of gold went up 4.53% over the same time frame.
Looking ahead, analysts are expecting more upside for RSG.
Republic Services' shares have outperformed its industry in the past year, partly due to earnings beat in the past four quarters and raised guidance. The company is focused on increasing its operational efficiency by shifting to compressed natural gas collection vehicles and converting rear-loading trucks to automated-side loaders to reduce costs. The company continues to grow internally with the help of long-term contracts for collection, recycling and disposal of solid waste materials. Consistency in dividend payments and share buybacks boost investors’ confidence and positively impact earnings per share. However, the company's operation in a highly-competitive solid waste industry is a concern. High debt may limit the company’s future expansion and worsen its risk profile. Seasoanlity continues to act as a major headwind.
Over the past four weeks, shares have rallied 5.39%, and there have been 2 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.