Head to Head Survey: Republic Services (NYSE:RSG) & GFL Environmental (NYSE:GFL)

GFL Environmental (NYSE:GFL) and Republic Services (NYSE:RSG) are both large-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Earnings and Valuation

This table compares GFL Environmental and Republic Services’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GFL Environmental $3.22 billion 3.19 -$742.69 million $0.13 241.54
Republic Services $10.15 billion 3.42 $967.20 million $3.56 30.55

Republic Services has higher revenue and earnings than GFL Environmental. Republic Services is trading at a lower price-to-earnings ratio than GFL Environmental, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GFL Environmental and Republic Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GFL Environmental -21.35% 1.50% 0.56%
Republic Services 9.97% 14.17% 5.16%

Dividends

GFL Environmental pays an annual dividend of $0.03 per share and has a dividend yield of 0.1%. Republic Services pays an annual dividend of $1.70 per share and has a dividend yield of 1.6%. GFL Environmental pays out 23.1% of its earnings in the form of a dividend. Republic Services pays out 47.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. GFL Environmental has raised its dividend for 1 consecutive years and Republic Services has raised its dividend for 11 consecutive years. Republic Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for GFL Environmental and Republic Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GFL Environmental 0 3 8 0 2.73
Republic Services 0 3 7 0 2.70

GFL Environmental presently has a consensus price target of $36.06, indicating a potential upside of 14.83%. Republic Services has a consensus price target of $107.67, indicating a potential downside of 1.01%. Given GFL Environmental’s stronger consensus rating and higher probable upside, equities analysts clearly believe GFL Environmental is more favorable than Republic Services.

Risk and Volatility

GFL Environmental has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Republic Services has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

57.7% of GFL Environmental shares are held by institutional investors. Comparatively, 57.6% of Republic Services shares are held by institutional investors. 0.2% of Republic Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Republic Services beats GFL Environmental on 11 of the 17 factors compared between the two stocks.

About GFL Environmental

GFL Environmental Inc. operates as a diversified environmental services company in Canada and the United States. The company offers non-hazardous solid waste management, infrastructure and soil remediation, and liquid waste management services. Its solid waste management business line includes the collection, transportation, transfer, recycling, and disposal of non-hazardous solid waste for municipal, residential, and commercial and industrial customers. The company's infrastructure and soil remediation business line provides remediation of contaminated soils, as well as complementary services, including civil, demolition, and excavation and shoring services. Its liquid waste management business collects, manages, transports, processes, and disposes of a range of industrial and commercial liquid wastes, as well as resells liquid waste products. The company was founded in 2007 and is headquartered in Vaughan, Canada.

About Republic Services

Republic Services, Inc., together with its subsidiaries, provides non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services in the United States. The company serves small-container, large-container, and municipal and residential customers. The company's collection services include curbside collection of material for transport to transfer stations, landfills, or recycling processing centers; supply of recycling and waste containers; and renting of compactors. It is also involved in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill and transfer services. In addition, the company offers disposal of non-hazardous solid and liquid material and in-plant services, such as transportation and logistics. As of December 31, 2020, the company operated through 345 collection operations, 220 transfer stations, 186 active landfills, 76 recycling processing centers, 9 salt water disposal wells, and 7 deep injection wells, as well as 6 treatment, recovery, and disposal facilities in 41 states. It also operated 75 landfill gas-to-energy and renewable energy projects and had 128 closed landfills. The company was incorporated in 1996 and is based in Phoenix, Arizona.

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