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Republic Services (RSG) Stock Up 16.4% in a Year: Here's Why

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Shares of Republic Services, Inc. (RSG - Free Report) have gained 16.4% over the past year, ahead of 31.4% decline of the industry it belongs to and 12% loss of the Zacks S&P 500 composite.

Zacks Investment Research
Image Source: Zacks Investment Research

Let’s delve into the factors which have contributed to the company’s price performance:

Consecutive Earnings & Revenue Beat

Republic Services reported better-than-expected earnings and revenue performance in the last four quarters. The company’s bottom line continued to benefit from improvement in operating margins. Favorable impacts of internal growth and acquisitions might have aided the top line.

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 2021, almost 13% of the replacement vehicles purchased 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. As of Dec 31, 2021, Republic Services operated 40 CNG fueling stations. All these factors make the company a solid investment proposition.

Shareholder-Friendly Moves

We are impressed with Republic Services’ consistent efforts in rewarding its shareholders through dividend payments and share repurchases. In 2021, 2020 and 2019, the company paid $552.6 million, $522.5 million and $491.2 million in dividends and repurchased shares worth $252.2 million, $98.8 million and $399.4 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 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 can consider are Cross Country Healthcare (CCRN - Free Report) , Gartner (IT - Free Report) and Avis Budget (CAR - Free Report) , each sporting a Zacks Rank #1 at present.

Cross Country Healthcare has an expected earnings growth rate of 54.2% for the current year. CCRN has a trailing four-quarter earnings surprise of 29.2%, on average.

Cross Country Healthcare has a long-term earnings growth rate of 6.9%.

Gartner’s shares have gained 1.2% in the past year. IT delivered a trailing four-quarter earnings surprise of 24.2%, on average.

The Zacks Consensus Estimate for Gartner's current-year earnings has moved up 13.6% in the past 90 days.

Avis Budget has an expected earnings growth rate of 59.8% for the current year. CAR delivered a trailing four-quarter earnings surprise of 102.1%, on average.

Avis Budget has a long-term earnings growth rate of 19.4%.