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Republic Services (RSG) Stock Gains 32% in a Year: Here's Why
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Republic Services (RSG - Free Report) had an impressive run over the past year. In the same time frame, the stock has gained 32% compared with the 21.3% rally of the industry it belongs to and the 26.1% rise of the Zacks S&P 500 composite.
RSG’s revenues for 2024 and 2025 are anticipated to increase 7.9% and 5.7%, respectively, on a year-over-year basis.Its earnings for 2024 and 2025 are expected to grow 7.8% and 10.5%, respectively, year over year.The company has an expected long-term (three to five years) earnings per share growth rate of 9.9%.
Reasons for the Upside
Republic Services’ earnings surpassed the Zacks Consensus Estimate in the past four quarters, delivering an average earnings surprise of 7.8%.
RSG, a leading waste disposal company, is expected to continue benefiting from ongoing trends like increasing environmental concerns, rapid industrialization, a rise in population and active government measures to reduce illegal dumping. The company focuses on the expansion of its recycling volume via improved material handling processes and programs.
Republic Services developed its first Polymer Center last year to increase the recycling of plastics across North America. The company’s top line increased 10.8% year over year in 2023 and is expected to grow 7.7%, 5.3%, and 7.9% in 2024, 2025 and 2026 year over year, respectively.
The company continues to focus on the implementation of digital tools that enhance the customer and employee experience. RSG’s RISE digital operations platform helps in route optimization and safety performance. It provides predictable service delivery to the customers.
Republic Services aims to develop an asset management system, which is anticipated to boost maintenance technician productivity and improve warranty recovery. The company expects to begin the deployment in the later part of this year using a phased approach. RSG estimates such a strategy to result in $20 million of annual cost savings by 2026.
Republic Services has put a greater emphasis on sustainability innovations and decarbonization. Its investments in plastic circularity and renewable natural gas are expected to become a platform for profitability. The company continues to advance its efforts to support decarbonization, including its commitment to fleet electrification. Currently, it has 15 collection vehicles in operations and expects to have more than 50 additional to its fleet by the end of this year.
RSG puts consistent efforts into rewarding its shareholders through dividend payments and share repurchases. In 2023, 2022 and 2021, the company paid out $650 million, $592.9 million and $552.6 million in dividends and repurchased shares worth $261.8 million, $203.5 million and $252.2 million, respectively.
Actions as such indicate the company’s commitment to creating value for shareholders and underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact the bottom line.
Image: Bigstock
Republic Services (RSG) Stock Gains 32% in a Year: Here's Why
Republic Services (RSG - Free Report) had an impressive run over the past year. In the same time frame, the stock has gained 32% compared with the 21.3% rally of the industry it belongs to and the 26.1% rise of the Zacks S&P 500 composite.
RSG’s revenues for 2024 and 2025 are anticipated to increase 7.9% and 5.7%, respectively, on a year-over-year basis.Its earnings for 2024 and 2025 are expected to grow 7.8% and 10.5%, respectively, year over year.The company has an expected long-term (three to five years) earnings per share growth rate of 9.9%.
Reasons for the Upside
Republic Services’ earnings surpassed the Zacks Consensus Estimate in the past four quarters, delivering an average earnings surprise of 7.8%.
RSG, a leading waste disposal company, is expected to continue benefiting from ongoing trends like increasing environmental concerns, rapid industrialization, a rise in population and active government measures to reduce illegal dumping. The company focuses on the expansion of its recycling volume via improved material handling processes and programs.
Republic Services developed its first Polymer Center last year to increase the recycling of plastics across North America. The company’s top line increased 10.8% year over year in 2023 and is expected to grow 7.7%, 5.3%, and 7.9% in 2024, 2025 and 2026 year over year, respectively.
The company continues to focus on the implementation of digital tools that enhance the customer and employee experience. RSG’s RISE digital operations platform helps in route optimization and safety performance. It provides predictable service delivery to the customers.
Republic Services aims to develop an asset management system, which is anticipated to boost maintenance technician productivity and improve warranty recovery. The company expects to begin the deployment in the later part of this year using a phased approach. RSG estimates such a strategy to result in $20 million of annual cost savings by 2026.
Republic Services has put a greater emphasis on sustainability innovations and decarbonization. Its investments in plastic circularity and renewable natural gas are expected to become a platform for profitability. The company continues to advance its efforts to support decarbonization, including its commitment to fleet electrification. Currently, it has 15 collection vehicles in operations and expects to have more than 50 additional to its fleet by the end of this year.
RSG puts consistent efforts into rewarding its shareholders through dividend payments and share repurchases. In 2023, 2022 and 2021, the company paid out $650 million, $592.9 million and $552.6 million in dividends and repurchased shares worth $261.8 million, $203.5 million and $252.2 million, respectively.
Actions as such indicate the company’s commitment to creating value for shareholders and underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact the bottom line.
Zacks Rank & Other Stocks to Consider
RSG currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are Kelly Services (KELYA - Free Report) and Charles River Associates (CRAI - Free Report) .
Kelly Services is currently a Zacks #1 Ranked (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
KELYA has a long-term earnings growth expectation of 13%. It delivered a trailing four-quarter earnings surprise of 45.8% on average.
Charles River Associates has a Zacks Rank #2 at present. It has a long-term earnings growth expectation of 16%.
CRAI delivered a trailing four-quarter earnings surprise of 19.1%, on average.