Environmental Services Sector

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Waste Management - >>> Turning trash into treasure

https://finance.yahoo.com/news/stock-market-sell-off-2-092800804.html

WM stock has fallen about 10% from its recent peak. That sell-off has come even though the leading waste management company is having another solid year. The company's revenue rose 5.5% in the second quarter, while its underlying earnings jumped 10.3% due to continuing margin expansion (its margin hit 30% for the first time ever).

The company has also made excellent progress on its strategic expansion plan. It spent over $750 million in the first half of the year growing its solid waste collection business via a string of strategic acquisitions, adding several new geographies while also expanding in some of its growth markets.

WM also continues to expand into adjacent areas to its core business to drive more growth. It recently opened two upgraded recycling facilities and is building several renewable natural gas projects. Meanwhile, it agreed to acquire leading medical waste services provider Stericycle for $7.2 billion, which should be an accretive deal for shareholders.

The company's growing cash flow will give it more money to return to shareholders. While WM plans to pause share repurchases over the next 18 months while it repays debt related to the Stericycle deal, it should continue increasing its dividend.

WM operates such a stable business that it rarely goes on sale. Because of that, the recent 10% discount in its share price looks like a compelling long-term buying opportunity. However, I'd like to see an even bigger discount before I buy more shares, with my target to buy them if they fall below $185.

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>>> Why Waste Management Stock Is in the Dumps Today


by Lou Whiteman

Motley Fool

Jul 25, 2024


https://finance.yahoo.com/news/why-waste-management-stock-dumps-152500560.html


Waste Management (NYSE: WM) reported second-quarter results that fell short of Wall Street expectations. Investors are moving on, sending shares of WM down 6% as of 10:45 a.m. ET.

Pricing drives revenue increase

Waste Management, which is rebranding itself as WM, is the nation's largest provider of collection, recycling, and disposal services for residential, industrial, and municipal customers. The company earned $1.69 per share in the second quarter on sales of $5.4 billion, falling short of Wall Street's estimates for $1.83 per share on sales of $5.43 billion.

Revenue was up 5.5%, fueled by a 6.8% increase in core pricing and an uptick in the value of the company's recycled commodities available for sale. Collection and disposal volumes declined by 0.3%.

Post-earnings, WM raised its full-year guidance for adjusted operating earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow by $100 million. WM continues to consolidate the industry, in the quarter closing deals in Long Island, Florida, North Carolina, and Arizona. It also has a deal in place to acquire medical waste specialist Stericycle for $7.2 billion.

Is WM stock a buy?

The bottom-line numbers disappointed investors, but the quarter was largely business as usual for WM and a reminder of the consistency this business provides. So far in 2024, net cash from operating activities has increased by 21.6% to $2.52 billion and WM is putting that cash to work on expansion.

The issue is that WM is in a cyclical industry: Waste volumes tend to move with economic activity. With that in mind, the downtick in collection and disposal is a worrisome sign. Should that trend continue in the quarters to come it will be hard for WM to rely on pricing power to continue to fuel revenue growth. The added uncertainty that comes with the Stericycle deal is likely also pushing investors to the sidelines.

For long-term investors there is a lot to like about WM, but the near term is full of uncertainty. Those willing to stomach volatility could see this as a buying opportunity.

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>>> Republic Services (NYSE:RSG) provides waste disposal and recycling services, offering a unique investment opportunity in the environmental services sector. As the world continues to grapple with the challenges of waste management, Republic Services is well-positioned to meet the growing demands.

https://finance.yahoo.com/news/3-best-dividend-stocks-buy-114500212.html

Republic Services is a great company for investors seeking investment opportunities in a stable industry. The company’s extensive network of landfills, recycling centers, and transfer stations positions it as a leader in the industry. Its strategy of acquiring smaller waste management companies has significantly bolstered its market position and expanded its service offerings. Furthermore, its financial performance has been extremely impressive over the last few years. Its strong cash flow generation, stable business model, and growing demand for its services underpin its ability to sustain and grow its dividend.

This has allowed the company to increase its dividend for 21 consecutive years. Additionally, Republic Services boasts a dividend yield of around 1.11%. With a strong outlook for the 2024 fiscal year, discerning investors have a unique opportunity to capitalize on its long-term upside potential.

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>>> Waste Management struck a deal to buy medical-waste-disposal company Stericycle for roughly $5.8 billion.


The Wall Street Journal

by Lauren Thomas

6-3-24


https://www.msn.com/en-us/money/companies/waste-management-near-deal-to-buy-stericycle/ar-BB1nuPRd?OCID=ansmsnnews11


The details

Waste Management said Monday it would acquire Stericycle for $62 a share in cash. The deal also includes about $1.4 billion of Stericycle’s net debt.

The Wall Street Journal reported on the deal Sunday.

The rationale

Stericycle’s operations would complement Waste Management’s and give the bigger company a deeper foothold in the medical-waste-disposal sector, which enjoyed a sharp uptick in demand during the heights of the Covid-19 pandemic.

Waste Management is one of the biggest players in the U.S. trash business. The Houston company has the biggest landfill network in North America, numbering more than 250, according to its website.

Waste Management’s biggest revenue driver today is its collection operations, which pick up solid waste and recyclables from homes and businesses and transport them to landfills and other facilities. It operates a separate recycling unit that gives communities an alternative to landfill disposal and accounts for about 8% of total revenue.

Bannockburn, Ill.-based Stericycle specializes in collecting and disposing of hazardous medical waste. The company also runs a document shredding business, called Shred-It.

The context

Stericycle shares closed Friday at $51.54, giving the company a market value of about $4.8 billion. The stock jumped by about 15% when Bloomberg reported late last month that Stericycle had received unspecified takeover interest.

The deal would be a fairly small bite for Waste Management, which has a market value of almost $85 billion. Its stock is up about 18% so far this year as investors cheer the company’s recent efforts to boost profits.

The M&A market in the U.S. is showing signs of life after a couple of years in the doldrums, when high interest rates and other factors discouraged would-be dealmakers.

Last week, ConocoPhillips said it agreed to acquire Marathon Oil in an all-stock deal valued at $17.1 billion. T-Mobile US also agreed to buy much of U.S. Cellular’s operations in a transaction valued at roughly $4.4 billion including debt.

Centerview Partners advised Waste Management on the deal, while Stericycle was advised by Bank of America.

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>>> BWXT-led Team Awarded $45 Billion Environmental Management Contract for DOE’s Hanford Site


BusinessWire

March 4, 2024


https://finance.yahoo.com/news/bwxt-led-team-awarded-45-214500395.html


LYNCHBURG, Va., March 04, 2024--(BUSINESS WIRE)--BWX Technologies, Inc. (NYSE: BWXT) today announced a contract with an estimated value of up to $45 billion over a 10-year ordering period from the U.S. Department of Energy (DOE) for environmental management operations at the Hanford Site in Washington.

The DOE announced that the Hanford Integrated Tank Disposition Contract (ITDC) was awarded to Hanford Tank Waste Operations & Closure, LLC (H2C), which is a joint venture led by a BWXT subsidiary and includes subsidiaries of Amentum and Fluor.

"This is an important award for BWXT and represents a significant objective as we continue to leverage our technical capabilities on high-consequence environmental restoration sites," said Rex Geveden, BWXT’s president and chief executive officer. "We are dedicated to supporting the U.S. Department of Energy’s environmental stewardship at this site, as well as national security and cleanup work for DOE sites across the nation."

"Our team is both honored and appreciative that DOE has selected us to take on the largest and most complex radioactive waste cleanup project in the United States," said Heatherly Dukes, president of BWXT’s Technical Services Group. "We are committed to working with our DOE Environmental Management customer, regulatory authorities and the Tri-Cities community in safely reducing the environmental liabilities at the site in an efficient and effective manner that is protective of the workforce, the public and the environment."

The scope of the ITDC includes operation of Hanford tank farm facilities, eventual operation of the Waste Treatment and Immobilization Plant, and responsibility for other core functions such as project management, security and emergency services, business performance, and environment, safety, health and quality.

The DOE is engaged in one of the great public works projects of this century at the Hanford Site near Richland, Washington. Responsible for the federal government’s cleanup of the legacy of more than 40 years of producing plutonium through the 1980s, DOE is transforming the site back into an operations mode to treat tank waste from the production era.

About BWXT

At BWX Technologies, Inc. (NYSE: BWXT), we are People Strong, Innovation Driven. Headquartered in Lynchburg, Virginia, BWXT is a Defense News Top 100 manufacturing and engineering innovator that provides safe and effective nuclear solutions for global security, clean energy, environmental restoration, nuclear medicine and space exploration. With approximately 7,800 employees, BWXT has 14 major operating sites in the U.S., Canada and the U.K. In addition, BWXT joint ventures provide management and operations at a dozen U.S. Department of Energy and NASA facilities.

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>>> Clean Harbors, Inc. (NYSE:CLH) - Number of Hedge Fund Holders: 30


https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171642712


Clean Harbors, Inc. (NYSE:CLH) is a Massachusetts-based company that provides environmental and industrial services in North America. The company operates through two segments, Environmental Services and Safety-Kleen Sustainability Solutions. The Safety-Kleen Sustainability Solutions segment offers pickup and transportation services for hazardous and non-hazardous containerized waste for recycling or disposal. Clean Harbors, Inc. (NYSE:CLH) is one of the leading recycling stocks to invest in.

Baird analyst David Manthey on November 3 raised the price target on Clean Harbors, Inc. (NYSE:CLH) to $155 from $150 and maintained an Outperform rating on the shares. The analyst sees a good setup for ongoing solid pricing and deferred waste streams, perhaps cushioning results, while PFAS/reshoring/increased blended oil sales could also augment his view.

According to Insider Monkey’s data, 30 hedge funds were long Clean Harbors, Inc. (NYSE:CLH) at the end of September 2022, with combined stakes worth $497 million, compared to 28 funds in the prior quarter worth $408 million. Ian Simm’s Impax Asset Management is the largest position holder in the company, with 1.12 million shares valued at $123 million.

Meridian Funds made the following comment about Clean Harbors, Inc. (NYSE:CLH) in its Q3 2022 investor letter:

“Clean Harbors, Inc. (NYSE:CLH) is a leading hazardous waste treatment, storage, and disposal management company in North America and one of our longer-term holdings. Particularly impressive are its hazardous waste incinerators, which are nearly impossible to replicate. We also like its oil re-refinery business which is gaining recognition as a sustainable source of motor oil. Through cost controls and price increases, the company was successful in managing the inflationary environment during the period. Utilization of its incinerator network reached 90% during its most recently reported quarter and pricing increased 18% from a year ago. High and increasing base oil prices provided an additional boost to its re-refinery business, widening the spread between the price Clean Harbors charges for its refined oil and the price it pays for used oil. A resurgence in U.S. manufacturing activity and the accretive acquisition of HydroChemPSC also contributed to investors’ enthusiasm for the stock. Although our long-term outlook for Clean Harbors remains upbeat, we trimmed our position in the stock due to the company’s high debt balance as a result of the acquisition. We also believe the economic slowdown may eventually impact Clean Harbors, which operates in a late-cycle industry and therefore tends to have a delayed response to economic developments.”

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>>> Clean Harbors, Inc. (CLH) provides environmental and industrial services in the United States and internationally. The company operates through two segments, Environmental Services and Safety-Kleen Sustainability Solutions.

The Environmental Services segment collects, transports, treats, and disposes hazardous and non-hazardous waste, such as resource recovery, physical treatment, fuel blending, incineration, landfill disposal, wastewater treatment, lab chemicals disposal, and explosives management services; and offers CleanPack services, including collection, identification, categorization, specialized packaging, transportation, and disposal of laboratory chemicals and household hazardous waste. This segment also provides industrial maintenance and specialty industrial services; and utilizes specialty equipment and resources that performs field services.

The Safety-Kleen Sustainability Solutions segment provides pickup and transportation services for hazardous and non-hazardous containerized waste for recycling or disposal; machine cleaning and maintenance, and disposal and replenishment of clean solvent or aqueous fluids; and vacuum services to remove solids, residual oily water, and sludge and other fluids from customers' oil/water separators, sumps, and collection tanks, as well as removes and collects waste fluids found at large and small industrial locations, including metal fabricators, auto maintenance providers, and general manufacturers. This segment also manufactures, formulates, packages, distributes, and markets lubricants and other automotive products. Clean Harbors, Inc. was incorporated in 1980 and is headquartered in Norwell, Massachusetts.

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