Clean Harbors Inc (CLH), Waste Connections, Inc. (WCN), Republic Services, Inc. (RSG): Find Cash in Trash

Even through the economic turmoil and decreasing revenue, the firm managed to generate increasing profits and margins, proving its resilience. As the economy recovers, further profit growth should derive from higher volumes and yields. Meanwhile, an expanded landfill base will also provide some upside.

Cash is important for Republic Services, Inc. (NYSE:RSG). As demand increases and regulations become stricter, investments in recycling and eco-friendly processing methods will separate successful companies from declining ones. Free cash flow will be also used to pay out dividends, repurchase shares, and pursue strategic acquisitions.

Moreover, as stated by Zacks analysts, “Republic Services, Inc. (NYSE:RSG) is currently focusing to increase its operational efficiency by converting to compressed natural gas collection vehicles and conversion of rear-loading trucks to automated-side loaders, which will reduce cost and improve profitability.”

So, trading at 22.6 times its earnings, at about a 15% discount to the industry average, while offering compelling and attainable growth prospects and targets, I’d recommend buying and holding this stock.

Bottom line

Although all three companies offer compelling growth prospects and look reasonably valued, I believe that the smallest of them in terms of market cap, Clean Harbors Inc (NYSE:CLH), stands as the best investment opportunity for the long-term. With a moated and increasingly specialized business, steady sources of income, plenty of cash and, especially, a great outlook for the years to come, this is a stock you should include in your investment portfolio.


Damian Illia has no position in any stocks mentioned. The Motley Fool recommends Republic Services and Waste Management. The Motley Fool owns shares of Clean Harbors and Waste Management.

The article Find Cash in Trash originally appeared on

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.