For Immediate Release
Chicago, IL – April 29, 2022 – Today, Zacks Investment Ideas feature highlights VanEck Environmental Services ETF EVX, Waste Management, Inc. WM and Waste Connections, Inc. WCN.
Bear Markets Bring Opportunity: Don't Waste This One
Here's an unpopular truth when it comes to the stock market – good investing can be boring at times. While trying to get in early on the next big growth story may be exhilarating, allowing solid companies to drive the growth of your portfolio over time will most often pay significant dividends into the future.
The stock market is the only place where things go on sale and people get scared. Panic has begun to set in as tech stocks have dipped back into a bear market, but we may have more to go before we see capitulation. One thing's for sure – it has paid to be defensive this year and shift portfolio allocations to more stable positions.
Waste removal is an industry that isn't all that glamorous. Yet when some of the top financial institutions in the world are the largest holders of these stocks, there's a good reason for it and investors would be wise to pay close attention.
The VanEck Environmental Services ETF tracks the performance of companies involved in waste collection, transfer and disposal services, recycling, soil remediation, and wastewater management. EVX has outperformed the major indices this year, and several of the ETF's constituents are making 52-week highs.
The two waste removal firms we will discuss below are top constituents in EVX, garnering over 20% of the ETF's total holdings. Volatility has been the name of the game over the past few months for the general market, but these companies are still trading at or within just a few percent of their respective all-time highs.
Stocks that hold up well through market corrections tend to lead when the indices resume their uptrends. Let's take a more in-depth look at these waste removal companies that are showing relative strength this year.
Waste Management, Inc.
Waste Management is a leading provider of integrated environmental solutions in North America, serving municipal, commercial and industrial customers. Headquartered in Houston, TX, WM has the largest network of recycling facilities and landfills in the industry, and its fleet of natural gas trucks is the largest heavy-duty truck fleet in North America.
WM has built a healthy track record of earnings surprises, beating consensus estimates in 17 out of its last 18 quarters. The company most recently reported Q1 EPS earlier this week of $1.29, a 15.18% surprise over the $1.12 consensus estimate. WM stock has advanced more than 26% during the past year on the heels of a 4.59% average earnings surprise over the past four quarters.
Dividend payments and share buybacks have continued to provide support for the stock. The Zacks Consensus Estimates for revenue and EPS for the current year stand at $19.04 billion (6.16% growth) and $5.43 (12.19% growth), respectively.
Waste Connections, Inc.
Waste Connections is an integrated solid waste services company, providing collection, transfer and disposal services in exclusive and secondary markets. The company also provides intermodal services for the movement of cargo and solid waste containers. WCN operates primarily in the United States and is headquartered in The Woodlands, TX.
WCN has strung together a noteworthy history of earnings surprises, exceeding estimates in each quarter for the past five years running. The company most recently reported Q4 earnings back in February of $0.83, a 2.47% surprise over the $0.81 consensus estimate. WCN has produced an average earnings surprise of 4.21% over the last four quarters, boosting the stock's 21% return in the past year.
Analysts have revised full-year earnings estimates upward by 0.54% over the past 60 days, anticipating EPS of $3.73. This translates to a respectable 15.5% growth rate relative to 2021. WCN's next earnings report is due out on May 3rd.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Waste Management, Inc. (WM) : Free Stock Analysis Report
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
VanEck Environmental Services ETF (EVX): ETF Research Reports
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