Will The Bull Run Continue For The Waste Removal Industry?
Zacks Investment Research | Nov 24, 2019 08:06PM ET
While waste is always meant to be dumped, the reverse is true most of the time with stocks of companies that help us dump waste. In fact, these stocks offer decent returns with low volatility as demand remains fairly stable through the economic cycle.
Cleanup companies have been witnessing strong performance on Wall Street since the beginning of this year. Factors like rise in oil production, increasing municipal solid waste, strong construction activity, economic growth and increase in the ageing population have fueled growth for these companies.
The state of recycling business however has stayed poor, mainly due to China's National Sword Program, which banned the import of the majority of recycled products in the country. Recycling operations across the industry and the world have been severely hampered.
At this juncture, can waste management maintain its momentum?
Industry on Solid Footing
The financial health of the waste removal services industry bears testimony to the fact that the scenario has improved considerably for players despite recycling-related headwinds. Revenues, cash flows and dividend paid, have increased in the trailing 12-month period.
Increase in population, industrialization and urbanization has resulted in a significant rise in garbage and recycling. However, the number of places to store or dump garbage has declined with landfills being filled and closed. This has created opportunities for waste management companies.
Further, technology adoption and use of advanced collection and recycling solutions is increasing. New technologies in containers are helping companies to increase operational efficiency and save costs. High tech containers now include odor reduction systems and capacity sensors.
Year to date, the Zacks Zacks Investment Research
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