Republic Services (RSG) Is A Blue Chip Value Stock: Should You Buy?

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The Research Service offers daily Zacks Ranking and Zacks Industry Ranking updates, full access to the Zacks #1 Ranking List, Stock Research Reports and Premium Stock Screens, all of which will help you become a smarter and more confident investor.

Zacks Premium also includes Zacks style scores.

What are Zacks style scores?

Zacks Style Scores are a unique set of guidelines that rate stocks based on three popular investment types and were developed as complementary indicators for the Zacks Ranking. This combination helps investors choose the stocks most likely to beat the market over the next 30 days.

Each stock is assigned a letter grade of A, B, C, D or F based on its value, growth and dynamic qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the higher the score, the better the chance the stock will outperform.

Style Scores are divided into four categories:

Value Rating

For value investors, it’s about finding good stocks at good prices and finding out which companies are trading at fair value before the market takes a swing. The Value Style Score uses ratios such as P/E, PEG, Price/Sales, Price/Cash Flow and a host of other multiples to help select the most attractive and discounted stocks.

Growth Score

While good value is important, growth-oriented investors focus more on a company’s financial strength and health, as well as its future prospects. The Growth Style Score considers forecasted and historical earnings, sales and cash flow to uncover stocks that will experience sustainable long-term growth.

Momentum Score

Momentum traders and investors live by the saying “the trend is your friend”. This style of investing involves taking advantage of rising or falling trends in a stock’s price or earnings prospects. Using factors such as the week-to-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to create a position in high-momentum stocks.

VGM score

What if you like to use all three types of investments? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive metrics to use with the Zacks Ranking. It rates each stock based on their combined weighted styles, helping to target the companies with the most attractive value, the best growth forecasts and the most promising momentum.

How Style Scores Work with Zacks Ranking

Zacks Rank is a proprietary stock rating model that harnesses the power of earnings estimate revisions, or changes to a company’s earnings forecast, to help investors build a successful portfolio.

Investors can count on the success of Zacks Rank, with #1 stocks (Strong Buy) producing an unmatched average annual return of +25.41% since 1988, more than double the performance of the S&P 500. But the model values ​​a large number of stocks, and there are over 200 companies with a strong buy rank, plus another 600 with a #2 (buy) rank, every day.

That totals over 800 top-rated stocks, and it can be difficult trying to pick the best stocks for you and your portfolio.

This is where Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means choosing stocks with a Zacks rank #1 or #2 that also have style scores of A or B. If you find yourself looking at stocks with a #3 (hold) rank, make sure that They also have A or B scores to ensure as much upside potential as possible.

Because the scores were created to work with the Zacks Ranking, the direction of revisions to a stock’s earnings estimates should be a key factor when deciding which stocks to buy.

For example, a stock with a rating of #4 (sell) or #5 (strong sell), even one with scores of A and B, will always have a lower earnings forecast, and a greater chance that the price will of its action also drops.

So the more stocks you have with a rank of #1 or #2 and scores of A or B, the better.

Stock to watch: Republic Services (RSG)

Republic Services is the second largest provider of non-hazardous solid waste collection, transfer, disposal, recycling and energy services in the United States. As of December 31, 2021, the company operated facilities in 41 states and Puerto Rico through 356 collection operations, 239 transfer stations, 198 active landfills, 71 recycling processing centers, three treatment, recovery and disposal facilities. disposal, 6 salt water disposal wells. The company is engaged in 77 landfill gas-to-energy and renewable energy projects and was responsible after the closure of 124 closed landfills. The was incorporated in Delaware in 1996.

RSG is a #3 (Hold) on the Zacks rank, with a VGM score of B.

It also boasts a value style score of B thanks to attractive valuation metrics like a forward P/E ratio of 26.95; value investors should take this into account.

Six analysts upgraded their earnings estimate in the past 60 days for fiscal 2022. Zacks’ consensus estimate rose $0.04 to $4.82 per share. RSG has an average earnings surprise of 8%.

With a strong Zacks ranking and top value and VGM style scores, RSG should be on the shortlist for investors.

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Republic Services, Inc. (RSG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.