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Here's Why Investors Should Retain Clean Harbors (CLH) Stock
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A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.
Here we focus on Clean Harbors, Inc. (CLH - Free Report) , a waste removal services stock, which is expected to register earnings per share growth of 109.1% in 2018. Earnings for 2019 are expected to increase 71.7%.
The company’s price performance in the past three months is pretty impressive. Shares of Clean Harbors have returned 5.1%, which compares favorably with the S&P 500 Composite’s gain of 0.9%.
We believe the stock has the potential to continue the momentum. The reasons behind our optimism include positive impacts of acquisitions, efficiency initiatives and shareholder-friendly moves.
Let’s discuss them in detail.
Strategic Acquisitions
Clean Harbors continues to grow with the help of multiple acquisitions in both new and existing markets. On Feb 23, the company completed acquisition of the U.S. Industrial Cleaning Business of Veolia Environmental Services North America LLC (the "Veolia Business") for $120.0 million. The buyout is expected to boost Clean Harbors’ geographic presence, customer base and improve the scale and potential of industrial services.
In 2017, Clean Harbors completed four acquisitions that contributed revenues of almost $14.5 million. All these purchases have helped the company in multiple lines of services, such as aiding it in waste minimization, remodeling of its fleet of trucks, growth in daylighting and hydro excavation services markets and complementing its closed loop model in relation to the sale of oil products.
In 2016, the company purchased seven businesses, which helped it in the sale of its oil products. These buyouts expanded the company’s used motor oil collection network, provided greater blending and packaging capabilities along with three additional oil re-refineries and also helped in reaching out to customers in the West Coast region of the United States.
The company continues to pursue inorganic growth opportunities in multiple geographies and lines of business. The global acquisition strategy increases Clean Harbors’ customer base by providing a long-term growth profitable platform.
Efficiency Initiatives
Clean Harbors continues to focus on improving its efficiency and lowering operating costs through advanced technology, process efficiencies and stringent cost management. In 2017, the company managed internalization of maintenance costs, procurement and supply chain improvements, headcount reductions and branch consolidations to improve efficiency. Additionally, it eyes strategic investment in businesses, which are likely to increase productivity.
Shareholder-Friendly Moves
We are impressed with Clean Harbors’ consistent record of returning value to shareholders in the form of share repurchases. In first-quarter 2018, Clean Harbors repurchased approximately 280,000 shares for $14.3 million. In 2017, 2016 and 2015, the company returned $48.9 million, $22.2 million and $73.3 million to its shareholders, respectively, through share buybacks. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.
Some better-ranked stocks in the broader Business Services sector include Mastercard Incorporated (MA - Free Report) , FLEETCOR Technologies, Inc. and WEX Inc. (WEX - Free Report) . While Mastercard and WEX carry a Zacks Rank #1, FLEETCOR Technologies sports a Zacks Rank #2.
The long-term expected earnings per share growth rate for Mastercard, FLEETCOR Technologies and WEX is 19%, 16.5% and 14.3%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Here's Why Investors Should Retain Clean Harbors (CLH) Stock
A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.
Here we focus on Clean Harbors, Inc. (CLH - Free Report) , a waste removal services stock, which is expected to register earnings per share growth of 109.1% in 2018. Earnings for 2019 are expected to increase 71.7%.
The company’s price performance in the past three months is pretty impressive. Shares of Clean Harbors have returned 5.1%, which compares favorably with the S&P 500 Composite’s gain of 0.9%.
We believe the stock has the potential to continue the momentum. The reasons behind our optimism include positive impacts of acquisitions, efficiency initiatives and shareholder-friendly moves.
Let’s discuss them in detail.
Strategic Acquisitions
Clean Harbors continues to grow with the help of multiple acquisitions in both new and existing markets. On Feb 23, the company completed acquisition of the U.S. Industrial Cleaning Business of Veolia Environmental Services North America LLC (the "Veolia Business") for $120.0 million. The buyout is expected to boost Clean Harbors’ geographic presence, customer base and improve the scale and potential of industrial services.
In 2017, Clean Harbors completed four acquisitions that contributed revenues of almost $14.5 million. All these purchases have helped the company in multiple lines of services, such as aiding it in waste minimization, remodeling of its fleet of trucks, growth in daylighting and hydro excavation services markets and complementing its closed loop model in relation to the sale of oil products.
In 2016, the company purchased seven businesses, which helped it in the sale of its oil products. These buyouts expanded the company’s used motor oil collection network, provided greater blending and packaging capabilities along with three additional oil re-refineries and also helped in reaching out to customers in the West Coast region of the United States.
The company continues to pursue inorganic growth opportunities in multiple geographies and lines of business. The global acquisition strategy increases Clean Harbors’ customer base by providing a long-term growth profitable platform.
Efficiency Initiatives
Clean Harbors continues to focus on improving its efficiency and lowering operating costs through advanced technology, process efficiencies and stringent cost management. In 2017, the company managed internalization of maintenance costs, procurement and supply chain improvements, headcount reductions and branch consolidations to improve efficiency. Additionally, it eyes strategic investment in businesses, which are likely to increase productivity.
Shareholder-Friendly Moves
We are impressed with Clean Harbors’ consistent record of returning value to shareholders in the form of share repurchases. In first-quarter 2018, Clean Harbors repurchased approximately 280,000 shares for $14.3 million. In 2017, 2016 and 2015, the company returned $48.9 million, $22.2 million and $73.3 million to its shareholders, respectively, through share buybacks. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.
Zacks Rank & Stocks to Consider
Currently, Clean Harbors has 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 include Mastercard Incorporated (MA - Free Report) , FLEETCOR Technologies, Inc. and WEX Inc. (WEX - Free Report) . While Mastercard and WEX carry a Zacks Rank #1, FLEETCOR Technologies sports a Zacks Rank #2.
The long-term expected earnings per share growth rate for Mastercard, FLEETCOR Technologies and WEX is 19%, 16.5% and 14.3%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>