Critical Comparison: Advanced Disposal Services (ADSW) vs. Vertex Energy (VTNR)
Vertex Energy (NASDAQ: VTNR) and Advanced Disposal Services (NYSE:ADSW) are both industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
This is a summary of recent recommendations and price targets for Vertex Energy and Advanced Disposal Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Advanced Disposal Services||0||3||5||0||2.63|
Volatility & Risk
Vertex Energy has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Advanced Disposal Services has a beta of -0.67, indicating that its stock price is 167% less volatile than the S&P 500.
This table compares Vertex Energy and Advanced Disposal Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Advanced Disposal Services||-1.61%||5.84%||1.41%|
Institutional and Insider Ownership
19.1% of Vertex Energy shares are held by institutional investors. Comparatively, 96.5% of Advanced Disposal Services shares are held by institutional investors. 31.0% of Vertex Energy shares are held by insiders. Comparatively, 1.2% of Advanced Disposal Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Vertex Energy and Advanced Disposal Services’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Vertex Energy||$98.08 million||0.29||-$3.95 million||($0.51)||-1.73|
|Advanced Disposal Services||$1.40 billion||1.43||-$30.40 million||($0.28)||-81.03|
Vertex Energy has higher earnings, but lower revenue than Advanced Disposal Services. Advanced Disposal Services is trading at a lower price-to-earnings ratio than Vertex Energy, indicating that it is currently the more affordable of the two stocks.
Advanced Disposal Services beats Vertex Energy on 9 of the 13 factors compared between the two stocks.
Vertex Energy Company Profile
Vertex Energy, Inc. is an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The Company focuses on recycling used motor oil and other petroleum by-products. The Company’s segments include the Black Oil, Refining and Marketing, and Recovery divisions. The Company’s product categories include Used Motor Oil, Fuel Oil, pyrolysis gasoline (Pygas), Gasoline Blendstock and Base Oil. The Black Oil division is engaged in operations across the used motor oil recycling value chain, including collection, aggregation, transportation, storage, refinement and sales of aggregated feedstock and re-refined products to end users. The Refining and Marketing division is engaged in the aggregation of feedstock, re-refining it into end products, and selling these products to customers. The Recovery division is a provider of generator solutions for the recovery and management of hydrocarbon streams.
Advanced Disposal Services Company Profile
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.
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