Critical Contrast: Covanta (CVA) & The Competition
Covanta (NYSE: CVA) is one of 20 public companies in the “Waste Management, Disposal & Recycling Services” industry, but how does it compare to its competitors? We will compare Covanta to related businesses based on the strength of its valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.
Institutional and Insider Ownership
94.8% of Covanta shares are owned by institutional investors. Comparatively, 53.0% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by institutional investors. 11.6% of Covanta shares are owned by insiders. Comparatively, 12.3% of shares of all “Waste Management, Disposal & Recycling Services” companies 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.
This table compares Covanta and its competitors top-line revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Covanta||$1.70 billion||-$4.00 million||-29.50|
|Covanta Competitors||$850.65 million||$28.19 million||147.52|
Covanta has higher revenue, but lower earnings than its competitors. Covanta is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
This table compares Covanta and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Covanta pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. Covanta pays out -200.0% of its earnings in the form of a dividend. As a group, “Waste Management, Disposal & Recycling Services” companies pay a dividend yield of 1.9% and pay out 98.2% of their earnings in the form of a dividend. Covanta is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.
This is a summary of recent ratings and price targets for Covanta and its competitors, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Covanta currently has a consensus price target of $17.79, indicating a potential upside of 20.58%. As a group, “Waste Management, Disposal & Recycling Services” companies have a potential upside of 10.08%. Given Covanta’s stronger consensus rating and higher possible upside, analysts plainly believe Covanta is more favorable than its competitors.
Risk & Volatility
Covanta has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Covanta’s competitors have a beta of 0.62, suggesting that their average share price is 38% less volatile than the S&P 500.
Covanta beats its competitors on 11 of the 14 factors compared.
Covanta Company Profile
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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