US Ecology (ECOL) & Waste Connections (WCN) Critical Analysis
US Ecology (NASDAQ: ECOL) and Waste Connections (NYSE:WCN) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.
US Ecology pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. Waste Connections pays an annual dividend of $0.38 per share and has a dividend yield of 0.6%. US Ecology pays out 56.3% of its earnings in the form of a dividend. Waste Connections pays out 32.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Waste Connections has increased its dividend for 7 consecutive years.
Risk & Volatility
US Ecology has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Waste Connections has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.
Earnings & Valuation
This table compares US Ecology and Waste Connections’ gross 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||38.63|
|Waste Connections||$4.40 billion||4.03||$1.37 billion||$1.18||56.84|
Waste Connections has higher revenue and earnings than US Ecology. US Ecology is trading at a lower price-to-earnings ratio than Waste Connections, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for US Ecology and Waste Connections, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
US Ecology currently has a consensus price target of $53.75, suggesting a potential upside of 8.70%. Waste Connections has a consensus price target of $71.33, suggesting a potential upside of 6.06%. Given US Ecology’s higher possible upside, equities research analysts clearly believe US Ecology is more favorable than Waste Connections.
This table compares US Ecology and Waste Connections’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
85.6% of US Ecology shares are owned by institutional investors. Comparatively, 82.8% of Waste Connections shares are owned by institutional investors. 1.3% of US Ecology shares are owned by insiders. Comparatively, 0.7% of Waste Connections shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Waste Connections beats US Ecology on 10 of the 18 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 Waste Connections
Waste Connections, Inc. is a solid waste services company in North America. The Company provides waste collection, transfer, disposal and recycling services in markets in the United States and Canada. The Company operates through six segments: Southern segment, Western segment, Eastern segment, Canada segment, Central segment and E&P segment. Through its R360 Environmental Solutions subsidiary, it also provides non-hazardous exploration and production, or E&P, waste treatment, recovery and disposal services in various natural resource producing areas in the United States. It also provides intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. As of December 31, 2016, it served residential, commercial, industrial and exploration and production (E&P) customers in 40 states and the District of Columbia in the United States and five provinces in Canada.
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