They say “one man’s meat is another man’s poison.” True to this saying, even the worst of certain situations could bring some positives for somebody. Hurricane Harvey, which made landfall in Texas as Category 4 hurricane, is one such example. The storm that caused widespread damage to life and property, severely affecting the energy and insurance sectors, offered some opportunities to the waste managent services sector after leaving behind a trail of debris.
This has brought to the fore the importance of three leading waste disposal companies in the region to help clear the rubble and bring it back to its feet. In addition, the cleaning of any spillage from petrochemical and refining units from incessant rains and subsequent flooding will call into service their specialized skills and expertise in this field.
Let's dig a little deep into these three waste disposal stocks to get a fair idea of their individual skill sets.
Waste Management, Inc. (WM - Free Report) : Headquartered in Houston, TX, this Zacks Rank #3 (Hold) stock provides collection, transfer, recycling and resource recovery, and disposal services to nearly 21 million residential, commercial, industrial and municipal customers. The company is reportedly the largest provider of comprehensive waste management services in North America. In addition to in-depth sector knowhow and related skills, it brings on board an extensive network of collection operations, solid waste landfills, transfer stations and recycling centers.
Waste Management handles approximately 100 million tons of disposal volume on a yearly basis, representing 40-45% of the U.S. waste disposal market. With an ability to stretch its operations on a war footing to help clear household as well as industrial wastes once the storm has passed and the water recedes, the company is likely to play a key role in restoring normalcy to the region. Waste Management has long-term earnings growth expectation of 9.5% and VGM Score of B. Earnings estimates are also currently trending up for the company.
Clean Harbors, Inc. (CLH - Free Report) : With several facilities on the Texas gulf coast, Clean Harbors is a leading provider of environmental, energy and industrial services in North America. The company provides a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services.
Clean Harbors has earned a name for itself as a leading emergency response firm through a dedicated staff and integrated facilities. Consequently, the company is expected to leverage its expansive infrastructure, specialized equipment, capital base and customer relationships to help rebuild the ravaged region. Clean Harbors has a VGM Score of A and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Waste Connections, Inc. (WCN - Free Report) : This Zacks Rank #3 stock offers non-hazardous oilfield waste treatment, recovery and disposal services in various active natural resource producing areas in the country through its R360 Environmental Solutions subsidiary. Waste Connections serves more than six million residential, commercial, industrial, and exploration and production customers in 39 states.
With prime location of disposal sites within competitive markets, it offers vertically integrated services from collection through disposal of solid waste in landfills that it owns or operates. The operations are also managed on a decentralized basis to place decision-making authority close to the customer, enabling it to identify and address customers’ needs on a real-time basis in a cost-effective manner. Waste Connections has long-term earnings growth expectation of 8.1%. Earnings estimates are also currently trending up for the company.
The industry has outperformed the benchmark S&P 500 index in the last six months with an average return of 3.6% compared with 2.9% for the latter.
In addition to the philanthropic cause, the current adversity would seek to generate additional revenues for these waste disposal stocks. As these stocks hog the limelight, investors can also expect to benefit with their healthy fundamentals.
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