Covanta Holding's Focus On Technology Development Bodes Well
Zacks Investment Research | Mar 18, 2020 09:47PM ET
Covanta Holding Corporation’s (NYSE:CVA) focus on developing as well as commercializing new technology, systematic capital expenditures and development of total ash processing system are tailwinds.
The company has trailing four-quarter positive earnings surprise of 54.89% in the past four quarters. Long-term earnings growth of the company is pegged at 15%,
What’s Driving the Stock?
Over the past several years, Covanta Holding has been investing substantially to purchase property, plant and equipment. These expenditures were made to address infrastructural requirements and expand customer base for various capital projects. Moreover, the expenses were made to undertake acquisitions to curb competition, increase safety and reliability of its Energy-from-Waste (EfW) projects, provide solutions for solid waste and recyclable households besides hazardous wastes as well as modernize the system.
In 2019, the company invested $56 million in different growth projects. The company aims to invest nearly $35 million in different growth projects in 2020 to expand existing operations. This includes $10-million investments for strengthening international operations.
To lower long-term cost of ash disposal and become more sustainable while creating new revenue opportunities, the company has been developing its first total ash processing system (TAPS).
The company is also commercializing new technologies like recycling, alternative waste treatment processes, combustion controls, emission controls and residue recycling, reuse or disposal to develop existing operations. Covanta Holding is focused on preserving value of existing portfolio, expanding through project development and acquisitions in selected attractive markets as well as maintaining sustainability.
However, increased plant operating expenses, stringent laws and regulations in the United States and rising debt levels are headwinds for the company.
Zacks Rank & Price Performance
The stock carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.