Advanced Disposal Services (NASDAQ: ADSW) and Covanta Holding Corporation (NYSE:CVA) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability

This table compares Advanced Disposal Services and Covanta Holding Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Disposal Services -0.05% -0.10% -0.02%
Covanta Holding Corporation -1.41% -9.81% -0.96%

Dividends

Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. Advanced Disposal Services does not pay a dividend. Covanta Holding Corporation pays out -526.3% of its earnings in the form of a dividend.

Institutional & Insider Ownership

96.2% of Covanta Holding Corporation shares are owned by institutional investors. 11.6% of Covanta Holding Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Advanced Disposal Services and Covanta Holding Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Advanced Disposal Services $1.44 billion 1.51 $394.80 million N/A N/A
Covanta Holding Corporation $1.71 billion 1.10 $296.00 million ($0.19) -76.44

Advanced Disposal Services has higher revenue, but lower earnings than Covanta Holding Corporation.

Analyst Ratings

This is a breakdown of current ratings and target prices for Advanced Disposal Services and Covanta Holding Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Disposal Services 0 2 8 0 2.80
Covanta Holding Corporation 1 0 6 0 2.71

Advanced Disposal Services presently has a consensus price target of $25.22, suggesting a potential upside of 2.26%. Covanta Holding Corporation has a consensus price target of $17.07, suggesting a potential upside of 17.53%. Given Covanta Holding Corporation’s higher possible upside, analysts clearly believe Covanta Holding Corporation is more favorable than Advanced Disposal Services.

Summary

Advanced Disposal Services beats Covanta Holding Corporation on 7 of the 13 factors compared between the two stocks.

About Advanced Disposal Services

Advanced Disposal Services, Inc. is an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under exclusive arrangements. The Company’s segments include South, East, Midwest and Corporate. As of December 31, 2016, the Company had its presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, served approximately 2.7 million residential customers and over 200,000 commercial and industrial (C&I) customers through its network of 90 collection operations, 72 transfer stations, 21 owned or operated recycling facilities and 39 owned or operated active landfills. The Company’s vertically integrated environmental services operations can be classified into three lines of business: collection services, disposal services and recycling services. The disposal services include transfer stations and landfills.

About Covanta Holding Corporation

Covanta Holding Corporation is a holding company. The Company, through its subsidiaries, owns and operates infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The Company operates through North America segment, which consists of waste and energy services operations located primarily in the United States and Canada. Outside of North America, the Company is constructing an energy-from-waste (EfW) facility in Dublin, Ireland. The Company holds interests in an EfW facility in Italy and an infrastructure business in China, which is engaged in EfW operations. These EfW projects generate revenue from three main sources: fees charged for operating projects or processing waste received; the sale of electricity and/or steam, and the sale of ferrous and non-ferrous metals that are recovered from the waste stream as part of the EfW process.

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