For immediate release
Chicago, IL – August 12, 2022 – Today’s Zacks Investment Ideas feature highlights Waste Management, Inc. WM and Republic Services, Inc. RSG.
These stocks come together in bull and bear markets
Here’s an unpopular truth about the stock market: a good investment can sometimes be boring. While it can be exhilarating trying to jump into the next big growth story quickly, allowing strong companies to drive your portfolio growth over time will more often than not pay big dividends down the road.
We want to identify stocks that have held up well against volatility this year, as these companies are likely to continue their upward trajectory as the market stabilizes. These types of high-probability, low-risk investments can generate portfolio returns and help smooth profit streams.
Only the strongest stocks in the most powerful uptrends have been able to weather the storm this year. And not only have the following companies been able to do this, but they have now hit new all-time monthly highs as the market rebounded – a very bullish sign.
Let’s take a closer look at these market leaders and their industry group.
The waste disposal industry
Waste removal is an industry that is not very glamorous. Yet, when some of the world’s leading financial institutions are major holders of these stocks, there is a good reason for it and investors would be well advised to pay close attention.
The Zacks waste disposal services industry is currently ranked in the top 14% out of approximately 250 industries. Because it is ranked in the top half of all industries ranked by Zacks, we expect it to outperform the market over the next 3-6 months. Digging a little deeper, this industry has held up much better than the S&P 500 this year, falling about 5% versus an 11% loss for the blue chip index.
Quantitative research studies have repeatedly illustrated that approximately half of a stock’s future price appreciation is due to its industry group. By targeting stocks within leading industries, we can provide a consistent ‘tailwind’ to our investment success.
2 actions showing relative strength
waste management, inc.
Waste Management is a leading provider of integrated environmental solutions in North America, serving municipal, commercial and industrial customers. Based in Houston, TX, WM has the largest network of recycling and landfill facilities in the industry, and its natural gas truck fleet is the largest heavy-duty truck fleet in North America.
A Zacks No. 2 (buy) stock, WM has built a strong track record of earnings surprises, missing estimates only once in the past five years. The company recently announced second-quarter EPS of $1.44/share last month, a surprise of 5.88% from the consensus estimate of $1.36.
Dividend payouts and share buybacks continued to support the stock. Zacks consensus estimates for revenue and EPS for the current year are $19.77 billion (10.27% growth) and $5.70 (17.77% growth), respectively.
Republic Services, Inc.
Republic Services provides waste collection, recycling, disposal and energy services to commercial, industrial, municipal and residential customers in the United States and Puerto Rico. Based in Phoenix, AZ, RSG operates more than 300 collection facilities in 39 different states.
At Zacks #2 Buy stock, RSG has put together a remarkable track record of earnings surprises, beating estimates in every quarter for the past five years. The company recently announced second-quarter EPS of $1.32/share last week, a surprise of 11.86% from estimates. RSG has a surprise on the average earnings of the last four quarters of 7.3%. Also note the consistent performance over the past decade, which has gone through multiple bear markets.
RSG management continues to increase its guidance and consistency with dividend payouts and share buybacks will ensure that investor confidence remains strong. Analysts covering the business have revised their full-year earnings estimates up nearly 2.6% in the past 60 days to $4.78, a growth rate of 14.6% from compared to last year.
Be sure to keep an eye out for these stable, dividend-paying stocks that have also generated substantial price appreciation over the long term.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor more information on the performance figures displayed in this press release.
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 .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.