Stock of the Day

February 25, 2022

Republic Services (RSG)

$254.07
+$0.91 (+0.4%)
Market Cap: $79.46B

About Republic Services

Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States and Canada. It is involved in the collection and processing of recyclable, solid waste, and industrial waste materials; transportation and disposal of non-hazardous and hazardous waste streams; and other environmental solutions. Its residential collection services include curbside collection of material for transport to transfer stations, landfills, recycling centers, and organics processing facilities; supply of recycling and waste containers; and renting of compactors. The company also engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill services. It serves small-container, large-container, and residential customers. The company was incorporated in 1996 and is based in Phoenix, Arizona.

Republic Services Bull Case

Here are some ways that investors could benefit from investing in Republic Services, Inc.:

  • The current stock price is around $257.61, reflecting strong market performance and investor confidence.
  • Republic Services, Inc. reported a quarterly earnings per share (EPS) of $1.58, exceeding analysts' expectations, which indicates robust financial health and operational efficiency.
  • The company has a solid return on equity of 18.28%, suggesting effective management and profitability relative to shareholder equity.
  • With a net margin of 12.74%, Republic Services, Inc. demonstrates strong profitability, which can lead to higher dividends and reinvestment opportunities.
  • Recent institutional investments, including significant stakes from major banks, indicate strong confidence in the company's future growth potential.

Republic Services Bear Case

Investors should be bearish about investing in Republic Services, Inc. for these reasons:

  • The company has a relatively high P/E ratio of 39.69, which may suggest that the stock is overvalued compared to its earnings, potentially limiting future price appreciation.
  • Despite recent growth, the revenue of $4.01 billion for the last quarter fell short of analyst estimates, indicating potential challenges in meeting market expectations.
  • The current ratio of 0.58 suggests that the company may have liquidity issues, as it indicates that current liabilities exceed current assets.
  • With a debt-to-equity ratio of 1.04, Republic Services, Inc. has a significant amount of debt compared to equity, which could pose risks in a rising interest rate environment.
  • Market volatility and economic uncertainties could impact the company's performance, making it a riskier investment in the current climate.
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