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Here's Why You Should Retain Republic Services (RSG) Now
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Republic Services (RSG - Free Report) had an impressive performance on the bourses in the past year, growing 13.4% compared with the Waste Removal Services industry’s 5.7% rise.
RSG has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors Boding Well
As a prominent waste disposal firm, Republic Services is poised to capitalize on ongoing trends such as growing environmental awareness, rapid industrial growth, population expansion and government initiatives to combat illegal dumping. The company's primary focus is on enhancing recycling volumes through upgraded material handling methods and initiatives.
In the previous year, RSG introduced its inaugural Polymer Center to boost plastic recycling throughout North America. The company experienced robust 19.5% year-over-year revenue growth in the third quarter of 2022.
Republic Services is committed to enhancing operational efficiency and cutting down fleet operating expenses by transitioning to compressed natural gas (CNG) collection vehicles. In 2022, approximately 20% of the company's recycling and solid waste collection fleet utilized CNG, and 17% of their new recycling and solid waste vehicle acquisitions were CNG-based. At the end of 2022, RSG operated 45 CNG fueling stations.
Republic Services' current ratio (a measure of liquidity) at the end of the second quarter of 2023 was 0.76, higher than 0.74 reported at the end of the previous quarter and the prior-year quarter's figure of 0.73. An increase in the current ratio indicates that the company should not have problems meeting its short-term obligations.
Key Risks
Republic Services depends on purchasing fuel from the open market to operate its collection and transfer trucks and equipment for environmental services. Fuel prices are characterized by significant unpredictability and are susceptible to fluctuations due to various factors. RSG may encounter challenges in completely offsetting rising fuel expenses through fuel recovery fees due to contractual or market constraints.
In 2022, the company's fuel costs amounted to $631.1 million, making up 4.7% of its revenues, in contrast to the $383 million spent in 2021, which represented 3.4% of its revenues. Republic Services experiences significant seasonality in its revenues, leading to reduced income and heightened operational risks.
RSG carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the Business Services sector that may be considered by investors:
DocuSign (DOCU - Free Report) currently holds a Zacks Rank #2 (Buy). It beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 27.1%. The Zacks Consensus Estimate for fiscal 2024 revenues and earnings indicates growth of 8.1% and 24.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Automatic Data (ADP - Free Report) currently has a Zacks Rank #2. The company beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies growth of 6.3% and 11.1%, respectively.
Broadridge (BR - Free Report) currently carries a Zacks Rank #2. It beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average being 0.5%. The Zacks Consensus Estimate for fiscal 2024 revenues and earnings calls for a rise of 7.2% and 8.8%, respectively.
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Here's Why You Should Retain Republic Services (RSG) Now
Republic Services (RSG - Free Report) had an impressive performance on the bourses in the past year, growing 13.4% compared with the Waste Removal Services industry’s 5.7% rise.
RSG has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors Boding Well
As a prominent waste disposal firm, Republic Services is poised to capitalize on ongoing trends such as growing environmental awareness, rapid industrial growth, population expansion and government initiatives to combat illegal dumping. The company's primary focus is on enhancing recycling volumes through upgraded material handling methods and initiatives.
Republic Services, Inc. Price
Republic Services, Inc. price | Republic Services, Inc. Quote
In the previous year, RSG introduced its inaugural Polymer Center to boost plastic recycling throughout North America. The company experienced robust 19.5% year-over-year revenue growth in the third quarter of 2022.
Republic Services is committed to enhancing operational efficiency and cutting down fleet operating expenses by transitioning to compressed natural gas (CNG) collection vehicles. In 2022, approximately 20% of the company's recycling and solid waste collection fleet utilized CNG, and 17% of their new recycling and solid waste vehicle acquisitions were CNG-based. At the end of 2022, RSG operated 45 CNG fueling stations.
Republic Services' current ratio (a measure of liquidity) at the end of the second quarter of 2023 was 0.76, higher than 0.74 reported at the end of the previous quarter and the prior-year quarter's figure of 0.73. An increase in the current ratio indicates that the company should not have problems meeting its short-term obligations.
Key Risks
Republic Services depends on purchasing fuel from the open market to operate its collection and transfer trucks and equipment for environmental services. Fuel prices are characterized by significant unpredictability and are susceptible to fluctuations due to various factors. RSG may encounter challenges in completely offsetting rising fuel expenses through fuel recovery fees due to contractual or market constraints.
In 2022, the company's fuel costs amounted to $631.1 million, making up 4.7% of its revenues, in contrast to the $383 million spent in 2021, which represented 3.4% of its revenues. Republic Services experiences significant seasonality in its revenues, leading to reduced income and heightened operational risks.
RSG carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the Business Services sector that may be considered by investors:
DocuSign (DOCU - Free Report) currently holds a Zacks Rank #2 (Buy). It beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 27.1%. The Zacks Consensus Estimate for fiscal 2024 revenues and earnings indicates growth of 8.1% and 24.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Automatic Data (ADP - Free Report) currently has a Zacks Rank #2. The company beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 3.1%. The consensus estimate for fiscal 2023 revenues and earnings implies growth of 6.3% and 11.1%, respectively.
Broadridge (BR - Free Report) currently carries a Zacks Rank #2. It beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched on one instance, the average being 0.5%. The Zacks Consensus Estimate for fiscal 2024 revenues and earnings calls for a rise of 7.2% and 8.8%, respectively.