3 Waste Disposal Stocks In Focus As Harvey Wreaks Havoc
Zacks Investment Research | Aug 31, 2017 04:46AM ET
They say “one man’s meat is another man’s poison.” True to this saying, even the worst of certain situations could bring some positives for somebody. Hurricane Harvey, which made landfall in Texas as Category 4 hurricane, is one such example. The storm that caused widespread damage to life and property, severely affecting the energy and insurance sectors, offered some opportunities to the waste managent services sector after leaving behind a trail of debris.
This has brought to the fore the importance of three leading waste disposal companies in the region to help clear the rubble and bring it back to its feet. In addition, the cleaning of any spillage from petrochemical and refining units from incessant rains and subsequent flooding will call into service their specialized skills and expertise in this field.
Let's dig a little deep into these three waste disposal stocks to get a fair idea of their individual skill sets.
Waste Management, Inc. (NYSE:WM) : Headquartered in Houston, TX, this Zacks Rank #3 (Hold) stock provides collection, transfer, recycling and resource recovery, and disposal services to nearly 21 million residential, commercial, industrial and municipal customers. The company is reportedly the largest provider of comprehensive waste management services in North America. In addition to in-depth sector knowhow and related skills, it brings on board an extensive network of collection operations, solid waste landfills, transfer stations and recycling centers.
Waste Management handles approximately 100 million tons of disposal volume on a yearly basis, representing 40-45% of the U.S. waste disposal market. With an ability to stretch its operations on a war footing to help clear household as well as industrial wastes once the storm has passed and the water recedes, the company is likely to play a key role in restoring normalcy to the region. Waste Management has long-term earnings growth expectation of 9.5% and industry has outperformed the benchmark S&P 500 index in the last six months with an average return of 3.6% compared with 2.9% for the latter.
In addition to the philanthropic cause, the current adversity would seek to generate additional revenues for these waste disposal stocks. As these stocks hog the limelight, investors can also expect to benefit with their healthy fundamentals.
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