US Ecology (NASDAQ: ECOL) and Casella Waste Systems (NASDAQ:CWST) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a summary of current recommendations for US Ecology and Casella Waste Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
US Ecology 1 1 2 0 2.25
Casella Waste Systems 0 2 3 0 2.60

US Ecology presently has a consensus price target of $53.75, suggesting a potential upside of 8.37%. Casella Waste Systems has a consensus price target of $16.60, suggesting a potential downside of 4.21%. Given US Ecology’s higher possible upside, analysts clearly believe US Ecology is more favorable than Casella Waste Systems.

Earnings and Valuation

This table compares US Ecology and Casella Waste Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
US Ecology $478.29 million 2.26 $106.70 million $1.28 38.75
Casella Waste Systems $582.75 million 1.25 $112.99 million ($1.40) -12.38

Casella Waste Systems has higher revenue and earnings than US Ecology. Casella Waste Systems is trading at a lower price-to-earnings ratio than US Ecology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares US Ecology and Casella Waste Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
US Ecology 5.86% 11.37% 4.11%
Casella Waste Systems -10.01% -60.26% 3.31%

Institutional and Insider Ownership

85.6% of US Ecology shares are owned by institutional investors. Comparatively, 77.4% of Casella Waste Systems shares are owned by institutional investors. 1.3% of US Ecology shares are owned by insiders. Comparatively, 11.5% of Casella Waste Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

US Ecology has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Casella Waste Systems has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Dividends

US Ecology pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Casella Waste Systems does not pay a dividend. US Ecology pays out 56.3% of its earnings in the form of a dividend.

Summary

US Ecology beats Casella Waste Systems on 9 of the 16 factors compared between the two stocks.

About US Ecology

US Ecology, Inc. is a provider of environmental services to commercial and government entities. The Company offers treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a range of field and industrial services. The Company operates in two business segments: Environmental Services, and Field & Industrial Services. Its Environmental Services segment provides a range of hazardous material management services, including transportation, recycling, treatment and disposal of hazardous and non-hazardous waste at Company-owned landfill, wastewater and other treatment facilities. The Company’s Field & Industrial Services segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through its transfer facilities. Its services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste.

About Casella Waste Systems

Casella Waste Systems, Inc. is a solid waste services company. The Company provides resource management services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services. It manages its solid waste operations on a geographic basis through two regional operating segments: Eastern and Western regions, each of which provides a range of solid waste services, and its recycling and commodity brokerage operations through its Recycling segment. Organics services, ancillary operations and industrial services are included in its Other segment. As of January 31, 2017, the Company owned and/or operated 32 solid waste collection operations, 46 transfer stations, 18 recycling facilities, nine Subtitle D landfills, four landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition (C&D) materials.

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