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Republic Services (RSG) Benefits From Acquisitions, Debt Ails
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Republic Services, Inc.’s((RSG - Free Report) )shares have had an impressive run on the bourses over the past year. The stock has appreciated 30.1% over the past year against the 13% decline of the industry it belongs to. The Zacks S&P 500 composite rose 8.3% in the said time frame.
Image Source: Zacks Investment Research
The company recently reported fourth-quarter 2021 adjusted earnings per share of $1.02, which outpaced the consensus mark by 1% and rallied 2% year over year. Quarterly revenues of $2.95 billion surpassed the consensus estimate by 2.7% and increased 15% year over year.
How is Republic Services Doing?
Republic Services’ revenue growth is backed by the favorable impact of acquisition revenues and internal growth. In fourth-quarter 2021, the company witnessed a favorable impact of 9.9% from internal growth and 4.9% from acquisitions.
The company 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 2021, almost 13% of RSG’s replacement vehicle purchases were CNG vehicles. Meanwhile, the company is highly optimistic about the usage of CNG vehicles, which will help it compete effectively when it comes to maintaining a clean environment. Despite higher expenses, CNG reduces the company’s overall fleet-operating costs through lower fuel expenses. As of Dec 31, 2021, Republic Services operated 40 CNG fueling stations.
Republic Services has been consistent in rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, the company had repurchased shares worth $252.2 million, $98.8 million and $399.4 million, respectively. It paid $552.6 million, $522.5 million and $491.2 million in dividends during 2021, 2020 and 2019, 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.
Republic Services’ cash and cash equivalent balance of $29 million at the end of fourth-quarter 2021 was well below the long-term debt level of $9.55 billion, underscoring that the company does not have enough cash to meet this debt burden.
Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , Accenture (ACN - Free Report) and Clean Harbors (CLH - Free Report) . While Cross Country Healthcare sports a Zacks Rank #1, Accenture and Clean Harbors carry a Zacks Rank #2 (Buy) at present.
Cross Country Healthcare has a trailing four-quarter earnings surprise of 41.5%, on average.
Cross Country Healthcare’s shares have surged 68% in the past year. The company has a long-term earnings growth of 6.5%.
Accenture has an expected earnings growth rate of 19.8% for the current year. The company has a trailing four-quarter earnings surprise of 5.3%, on average.
Accenture’s shares have surged 26% in the past year. The company has a long-term earnings growth of 10%.
Clean Harbors has an expected earnings growth rate of 17% for the current year. The company has a trailing four-quarter earnings surprise of 43.2%, on average.
Clean Harbors’ shares have surged 11.9% in the past year.
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Republic Services (RSG) Benefits From Acquisitions, Debt Ails
Republic Services, Inc.’s ((RSG - Free Report) ) shares have had an impressive run on the bourses over the past year. The stock has appreciated 30.1% over the past year against the 13% decline of the industry it belongs to. The Zacks S&P 500 composite rose 8.3% in the said time frame.
Image Source: Zacks Investment Research
The company recently reported fourth-quarter 2021 adjusted earnings per share of $1.02, which outpaced the consensus mark by 1% and rallied 2% year over year. Quarterly revenues of $2.95 billion surpassed the consensus estimate by 2.7% and increased 15% year over year.
How is Republic Services Doing?
Republic Services’ revenue growth is backed by the favorable impact of acquisition revenues and internal growth. In fourth-quarter 2021, the company witnessed a favorable impact of 9.9% from internal growth and 4.9% from acquisitions.
The company 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 2021, almost 13% of RSG’s replacement vehicle purchases were CNG vehicles. Meanwhile, the company is highly optimistic about the usage of CNG vehicles, which will help it compete effectively when it comes to maintaining a clean environment. Despite higher expenses, CNG reduces the company’s overall fleet-operating costs through lower fuel expenses. As of Dec 31, 2021, Republic Services operated 40 CNG fueling stations.
Republic Services has been consistent in rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, the company had repurchased shares worth $252.2 million, $98.8 million and $399.4 million, respectively. It paid $552.6 million, $522.5 million and $491.2 million in dividends during 2021, 2020 and 2019, 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.
Republic Services’ cash and cash equivalent balance of $29 million at the end of fourth-quarter 2021 was well below the long-term debt level of $9.55 billion, underscoring that the company does not have enough cash to meet this debt burden.
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 Business Services sector that investors may consider are Cross Country Healthcare (CCRN - Free Report) , Accenture (ACN - Free Report) and Clean Harbors (CLH - Free Report) . While Cross Country Healthcare sports a Zacks Rank #1, Accenture and Clean Harbors carry a Zacks Rank #2 (Buy) at present.
Cross Country Healthcare has a trailing four-quarter earnings surprise of 41.5%, on average.
Cross Country Healthcare’s shares have surged 68% in the past year. The company has a long-term earnings growth of 6.5%.
Accenture has an expected earnings growth rate of 19.8% for the current year. The company has a trailing four-quarter earnings surprise of 5.3%, on average.
Accenture’s shares have surged 26% in the past year. The company has a long-term earnings growth of 10%.
Clean Harbors has an expected earnings growth rate of 17% for the current year. The company has a trailing four-quarter earnings surprise of 43.2%, on average.
Clean Harbors’ shares have surged 11.9% in the past year.