EVX

Trash Is Cash

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Image Source: Clyde Robinson By Brian Nelson, CFA It’s hard not to like exposure to the municipal solid waste industry. Dividend Growth Newsletter portfolio idea Republic Services (RSG) finished 2020 on a solid note, and you can read about our latest thoughts on the company here. From valuable disposal capacity to lucrative contract-based revenue with CPI-escalators, Republic Services is one strong consideration. Waste Management’s first-quarter 2021 results, released April 27, only reinforces our thesis on the waste hauler space. The read-through across the municipal solid waste space is a positive one for peers Republic Services and Waste Connections (WCN), as Waste Management is the bellwether for the group. Here’s what Waste Management CEO Jim Fish had to say about his … Read more

Garbage Hauler Republic Services Expects Record Year in 2021

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Image Source: Republic Services By Brian Nelson, CFA There are few things as certain as death and taxes, but garbage may be one of them. One of our favorite ideas within the municipal solid waste coverage is Republic Services (RSG), a holding in the Dividend Growth Newsletter portfolio. We love its free cash flow generating ability, visibility into future revenue, enviable position with respect to disposal capacity, CPI-based book of business, and exposure to fast-growing economic areas in the US. Republic Services reported strong fourth-quarter results Monday, February 22, and issued favorable 2021 full-year guidance. Revenue during the fourth quarter was largely flat, but adjusted net income rose to $1.00 per diluted share from $0.88 per diluted share in the … Read more

Republic Services Is a Great Company

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Image Shown: Shares of Republic Services Inc have been on an upward march over the past six months as investors warmed back up to the waste management company. We appreciate the company’s stable cash flow profile and high quality earnings, and we continue to include shares of RSG at a modest weighting in our Dividend Growth Newsletter portfolio. By Callum Turcan The waste management company Republic Services Inc (RSG) has proven to be incredibly resilient during the ongoing coronavirus (‘COVID-19’) pandemic. We are big fans of its stable cash flow profile and high quality earnings. According to Republic Services’ 2019 Annual Report the firm “is the second largest provider of non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services … Read more

Garbage Hauler Republic Services Doesn’t Disappoint in Third Quarter

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Image: Republic Services By Brian Nelson, CFA We like the garbage hauler space given the relative stability of its operations and the pricing power that emanates from landfill and disposal capacity. Garbage must eventually go somewhere, and those that own the disposal capacity are the ones that can control the value chain. The municipal solid waste industry in the United States is an oligopoly, dominated by the Big 3, Waste Management (WM), Republic Services (RSG), and Waste Connections (WCN). We include Republic Services in the Dividend Growth Newsletter portfolio. On November 5, Republic Services reported third-quarter results that showed the resilience of the firm’s business model. The trash taker’s adjusted EBITDA margin expanded 230 basis points, while it delivered double-digit … Read more

Republic Services Remains a Cash Cow, Raises Dividend

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Image Source: Arvell Dorsey Jr. We continue to be huge fans of the garbage hauler industry. One of our favorites, Republic Services reported second-quarter results that displayed the resilience of its operations and its cash-flow-generating prowess. The company raised its dividend payout 5%, and we plan to continue to include the company as an idea in the Dividend Growth Newsletter portfolio. By Brian Nelson, CFA On August 6, Republic Services (RSG) reported solid second-quarter results. Despite a global pandemic that is wreaking havoc across many industries, Republic Services reported adjusted net income for the period of $0.81 per share, which advanced a couple pennies on a year-over-year basis. We credit management for driving adjusted earnings higher in an environment of … Read more

Republic Services: “The Worst Is Behind Us…”

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The waste industry has a number of cost levers to pull to overcome profit pressures in its residential pick-up operations and reduced volume in its commercial and industrial operations, the latter a higher margin proposition. However, economic activity seems to be picking up, and some are saying the worst may be behind us. Our favorite waste hauler is Republic Services. By Brian Nelson, CFA We talked a lot about the waste industry in the book Value Trap: Theory of Universal Valuation, explaining why the oligopolistic structure of the trash-taking space is much more attractive than the oligopolistic structure of the airline industry. For one, the former holds tremendous pricing power (consumers might be willing to pay up to get their … Read more

Republic Services is Well Prepared

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Image Source: Republic Services Inc – March 2020 COVID-19 Investor Update Presentation By Callum Turcan Dividend Growth Newsletter portfolio holding Republic Services Inc (RSG), which was added to the portfolio back on January 13, 2020 (link here), is well positioned to ride out the turbulence created by the ongoing novel coronavirus (‘COVID-19’) pandemic. Before getting into its recent refinancing activity, please note that roughly four-fifths of Republic Services’ revenues comes from long-term contracts, and that fundamentally, waste disposal services are almost always in demand (hard to combat a healthcare crisis if trash is piling up on the streets, sidewalks, and can’t be properly disposed of in landfills). While its financials will face some pressures from the pandemic, Republic Services should … Read more

Republic Services Further Showcases Why It’s a Top Quality Defensive Firm

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Image Shown: We added Republic Services Inc to our Dividend Growth Newsletter portfolio on January 13, 2020, with shares of RSG included at a modest weighting. By Callum Turcan On February 13, waste management company Republic Services Inc (RSG) reported fourth quarter and full-year results for 2019. We added shares of RSG with a modest weighting to our Dividend Growth Newsletter portfolio back on January 13 (link here covering those changes) as part of our shift towards more defensive names in light of rising exogenous headwinds facing the global economy. Waste management services are always in demand, and while trash and recycling needs can fluctuate, this is a very recession-resistant space. Shares of RSG yield ~1.6% as of this writing … Read more

Why We Like Republic Services Over Casella

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Image Source: Republic Services Inc – 2018 Annual Report By Callum Turcan Let’s talk about the story of two garbage haulers, one that is extremely pricey and one that we just added to the Dividend Growth Newsletter portfolio. Casella Waste Systems Inc (CWST) has grown from a one truck company back in 1975, building Vermont’s first recycling facility in 1977, to a mid-sized waste disposal and recycling company as of today. The rally in shares of CWST over the past ~5 years has been stunning, with shares up over 12-fold since December 2014. We recently updated our models for Casella and the environmental services industry at-large (those reports can be viewed here), and want to caution our members that the … Read more

Waste Management’s Dividend Well-Covered with Free Cash Flow

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Image Source: david.dames  By Brian Nelson, CFA We continue to be huge fans of the garbage-collection business. In fact, we cannot remember a time when we didn’t like the waste collection space. The group benefits from a relatively recession-resistant pick-up operation, and transfer and disposal assets that simply demand pricing power. The trash-taking industry is also notorious for its free-cash-flow generating prowess, and we don’t think that will ever change. The latest data point as it relates to the health of the waste industry, and perhaps the general economy as well, came with Waste Management’s (WM) third-quarter results, released October 23. The company’s revenue advanced 3.8% thanks in part to strong all-in organic sales expansion in its collection and disposal … Read more