The global waste disposal market’s prospects look stable, owing to increased demand for improved waste management and technological improvements. Therefore, quality waste disposal stocks Ecolab Inc. (ECL), Republic Services, Inc. (RSG), Waste Connections, Inc. (WCN), Stericycle, Inc. (SRCL), and Concrete Pumping Holdings, Inc. (BBCP) could be wise additions to your portfolio now.
Rapid urbanization and industrialization are driving global demand for smart waste management, boosting the industry. The market is being influenced positively by increased awareness of the benefits of smart waste management systems and the need for sustainable trash management via IoT, sensors, and data analytics.
IMARC Group forecasts that the global smart waste management market will reach $5.30 billion by 2028, growing at a CAGR of 13.9%.
Moreover, the e-waste management market is projected to grow at a 12.1% CAGR until 2032. Due to increased electronic device usage, the e-waste management system sector, which includes stakeholders such as manufacturers, recyclers, refurbishers, and consumers in appropriate disposal procedures, has grown massively.
Let’s delve deeper into the fundamentals of the featured stocks.
Ecolab Inc. (ECL)
ECL provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences segments.
ECL’s ROCE of 15.99% is 49.7% higher than the 10.68% industry average. Likewise, its trailing-12-month levered FCF margin of 8.23% is 131.6% higher than the industry average of 3.55%.
ECL has paid dividends for 30 consecutive years. Over the last three years, ECL’s dividend payouts have grown at a 3.9% CAGR. While ECL’s four-year average dividend yield is 1.04%, the company’s annual dividend of $2.12 yields 1.12% at the current price level.
For the fiscal first quarter that ended March 31, 2023, ECL’s net sales increased 9.3% year-over-year to $3.57 billion. Its adjusted operating income increased 14.4% year-over-year to $379.30 million. Its adjusted net income came in at $250.50 million, up 5.9% from the previous year, and its EPS increased 7.5% from the year-ago period to $0.88 for the same year.
The consensus revenue estimate of $15.29 billion for the year ending December 2023 represents a 7.8% increase year-over-year. Its EPS is expected to grow 10.9% year-over-year to $4.98 for the same period. It surpassed EPS estimates in three of four trailing quarters. ECL’s shares have gained 35.1% over the past nine months to close the last trading session at $188.46.
ECL’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ECL has a B grade for Growth, Stability, and Quality. Within the B-rated Waste Disposal industry, it is ranked #8 out of 15 stocks. Click here for the additional POWR Ratings for Momentum, Sentiment, and Value for ECL.
Republic Services, Inc. (RSG)
RSG offers environmental services in the United States. It is involved in the collection and processing of recyclable, solid waste, and industrial waste materials; transportation and disposal of non-hazardous and hazardous waste streams; and other environmental solutions.
RSG’s EBITDA margin of 28.42% is 110.6% higher than the 13.50% industry average. Likewise, its trailing-12-month CAPEX / Sales of 10.61% is 271.5% higher than the industry average of 2.86%.
RSG has paid dividends for 19 consecutive years. Over the last three years, RSG’s dividend payouts have grown at a 6.9% CAGR. While RSG’s four-year average dividend yield is 1.57%, the company’s annual dividend of $1.98 yields 1.32% at the current price level.
On June 5, 2023, RSG acquired GFL Environmental’s Colorado and New Mexico operations. This transaction includes recycling facilities, collection services, and disposal activities in four significant Colorado cities (Denver, Colorado Springs, Durango, and Caon City), as well as the Bloomfield market in New Mexico.
This acquisition highlights the company’s dedication to the communities of Colorado and New Mexico, emphasizing its commitment to these regions.
For the fiscal first quarter, which ended March 31, 2023, RSG’s revenue increased 20.6% year-over-year to $3.58 billion, while its adjusted EBITDA grew 15.1% from the year-ago value to $1.04 billion.
The company’s adjusted net income and EPS amounted to $393.70 million and $1.24, up 9.1% and 8.8% from the prior-year quarter, respectively.
Street expects RSG’s revenue to increase 10.3% year-over-year to $14.90 billion for the year ending December 2023. Its EPS is expected to increase 7% year-over-year to $5.27 for the same period. It is expected to surpass EPS estimates in all four trailing quarters.
Over the past six months, the stock has gained 20.1% to close the last trading session at $149.98.
It’s no surprise that RSG has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B for Stability, Sentiment, and Quality. It is ranked #4 in the same industry.
Beyond what is stated above, we’ve also rated RSG for Value, Momentum, and Growth. Get all RSG ratings here.
Waste Connections, Inc. (WCN)
Based in Woodbridge, Canada, WCN provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada.
In terms of trailing-12-month WCN’s CAPEX / Sales of 12.54% is 339.04% higher than the 2.86% industry average. Likewise, its trailing-12-month levered FCF margin of 11.85% is 126% higher than the industry average of 5.24%.
WCN has paid dividends for 12 consecutive years. Over the last three years, WCN’s dividend payouts have grown at an 11.6% CAGR. While WCN’s four-year average dividend yield is 0.70%, the company’s annual dividend of $1.02 yields 0.72% at the current price level.
For the first quarter that ended March 31, 2023, WCN’s revenue increased 15.5% year-over-year to $1.90 billion, while its adjusted EBITDA increased 12.9% from the year-ago value to $566.90 million.
Furthermore, the company’s adjusted net income for the year rose 8% from the prior year’s period to $230.40 million, and its adjusted EPS came in at $0.89, an 8.5% year-over-year increase.
Analysts expect WCN’s revenue to increase 12% year-over-year to $8.08 billion for the year ending December 2023. Its EPS is expected to grow 9.9% year-over-year to $4.20 for the same period. It has surpassed the EPS estimates in all four trailing quarters.
The stock has gained 13.9% over the past year to close the last trading session at $141.42.
WCN’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, translating to Buy in our proprietary rating system.
It also has a B grade for Stability and Quality. It is ranked #7 within the same industry. Click here to see the additional ratings for WCN (Growth, Value, Momentum, and Sentiment).
Stericycle, Inc. (SRCL)
SRCL provides regulated and compliance solutions in the United States, Europe, and internationally.
SRCL’s trailing-12-month gross profit margin of 37.71% is 26.4% higher than the 29.83% industry average. Its trailing-12-month EBITDA margin of 16.71% is 23.8% higher than the 13.50% industry average.
During the fiscal first quarter that ended March 31, 2023, SRCL’s revenue increased 3% year-over-year to $684.30 million. Its gross profit increased 6.7% year-over-year to $261 million, while its income per common share attributable to SRCL came in at $0.12, compared to negative $0.15 in the previous-year quarter.
SRCL’s revenue is expected to increase 3.9% year-over-year to $2.84 billion for the year ended December 2024. Its EPS is expected to increase 23.8% year-over-year to $2.40 for the same period. It has surpassed revenue estimates in three of the four trailing quarters. Over the past nine months, the stock has gained 10.8% to close the last trading session at $45.29.
SRCL’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has an A grade for Growth and a B in Stability and Sentiment. It is ranked #5 in the same industry. To see additional SRCL ratings for Value, Momentum, and Quality, click here.
Concrete Pumping Holdings, Inc. (BBCP)
BBCP provides concrete pumping and waste management services in the United States and the United Kingdom.
BBCP’s trailing-12-month EBIT margin of 13.14% is 35% higher than the 9.73% industry average. Its trailing-12-month gross profit margin of 40.52% is 35.8% higher than the 29.83% industry average.
In the second quarter that ended April 30, 2023, BBCP’s revenue increased 11.7% year-over-year to $107.79 million. Its gross profit increased 11.6% year-over-year to $43.47 million, while its income from operations came in at $13.22 million, up 27.4% year-over-year.
Also, its net income per common share came in at $0.09. Also, its net income came in at $5.59 million.
Street expects BBCP’s revenue for the year ending October 2024 to increase 5.4% year-over-year to $462.06 million. Its EPS is expected to increase 34.6% year-over-year to $0.67 for the same quarter. It has surpassed EPS estimates in three of the trailing four quarters.
The stock has gained 29.2% over the past six months to close the last trading session at $8.10.
BBCP has an overall rating of B, which equates to a Buy in our POWR Ratings system. The stock is graded a B in Momentum, Stability, Sentiment, and Quality. It is ranked #3 in the Waste Disposal industry. To see additional BBCP’s ratings for Growth and Value, click here.
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ECL shares were trading at $187.29 per share on Monday morning, down $1.17 (-0.62%). Year-to-date, ECL has gained 29.49%, versus a 18.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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