Republic Services, Inc. RSG has performed well over the past year and has the potential to maintain momentum. If you haven’t yet benefited from its stock price appreciation, it’s time to add the stock to your portfolio.
Let’s look at the factors that make the stock an attractive choice.
an overachiever: Republic Services shares are up 15.3% in the past year vs. a 30.1% drop in industry it belongs to.
Image source: Zacks Investment Research
Bullish rank and VGM score: Republic Services currently has a Zacks Rank #2 (Buy) and a VGM score of A. Our research shows that stocks with a VGM score of A or B, when combined with a Zacks rank #1 (strong buy) or 2, offer the best investment opportunities. Thus, RSG seems a suitable investment proposition at the moment. You can see the full list of today’s Zacks #1 Rank stocks here.
Northward revisions to estimates: Five estimates for 2022 have moved north in the past 60 days against no revisions to the south, indicating analysts’ confidence in the stock. The Zacks consensus estimate for 2022 revenue is up 1.1% over the past 60 days.
History of positive results: Republic Services has an impressive history of earnings surprises. RSG’s net income has exceeded the Zacks consensus estimate for the past four quarters, with the average earnings surprise of 8.3%.
Strong prospects: Zacks consensus estimate for 2022 revenue is pegged at $4.67, suggesting 12% growth from the figure reported a year ago. Additionally, earnings are expected to grow by 12% in 2023. RSG’s expected long-term earnings per share (EPS) growth rate is 10.5%.
Solid driving factors: We are impressed with Republic Services’ consistent efforts to reward its shareholders through dividend payments and share buybacks. In 2021, 2020, and 2019, RSG paid $552.6 million, $522.5 million, and $491.2 million in dividends, respectively, and repurchased shares worth $252.2 million, $98.8 million and $399.4 million each. Such measures underpin RSG’s commitment to creating value for shareholders and inspiring confidence in its business. These moves also bolster investor optimism about the stock and have a positive impact on RSG’s earnings per share.
The waste management industry stands to benefit from the current scenario as the proper disposal of used masks, gloves, coveralls, syringes and other medical equipment is of utmost importance in curbing the spread of the coronavirus. Government initiatives along with strict rules and regulations to advance sustainable waste management mechanisms and control illegal dumping are also expected to boost the industry. Growing environmental concerns, rapid industrialization, increasing population, and an expected increase in non-hazardous waste due to rapid economic growth are expected to improve business opportunities for waste management companies.
The increasing adoption of recycling techniques, the development of advanced waste collection technologies and solutions are key trends within the industry. Recycling remains a major growth area, with most industry players taking steps to recycle municipal solid waste and non-hazardous industrial waste. According to a report by Allied Market Research Report, the global waste management market is expected to reach $2,483.0 billion by 2030 from $1,612.0 billion in 2020, growing at a CAGR of 3.4%. from 2021 to 2030. All of these factors bode well for Republic Services.
Other actions to consider
Other Actions to Consider in Wider Zacks Business services sector are Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRA.
Budget Reviews sports a #1 Zacks rank right now. The CAR forecasts long-term earnings growth of 19.4%.
Avis Budget recorded a four-quarter earnings surprise of 102%, on average.
Genpact currently has a Zacks rank of 2. G has a long-term earnings growth expectation of 12.3%.
Genpact posted a four-quarter earnings surprise of 13.3% on average.
ARC International is currently ranked No. 2 in Zacks. CRAI forecasts long-term earnings growth of 14.3%.
CRAI recorded an earnings surprise for the last four quarters of 35.8% on average.
Zacks names ‘only one best choice for doubling up’
From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.
It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could step in at any time.
This company could rival or surpass other recent Zacks stocks which are expected to double like Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one year .Free: See our best stock and our 4 finalists >>
Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.