For immediate release
Chicago, IL – April 29, 2022 – Today’s Zacks Investment Ideas feature highlights VanEck Environmental Services ETF EVX, Waste Management, Inc. WM and Waste Connections, Inc. WCN.
Bear Markets Provide Opportunities: Don’t Waste This One
Here’s an unpopular truth about the stock market: a good investment can sometimes be boring. While it can be exhilarating trying to jump into the next big growth story quickly, allowing strong companies to drive your portfolio growth over time will more often than not pay big dividends down the road.
The stock market is the only place where things are on sale and people are scared. Panic has started to set in as tech stocks fall back into a bear market, but we may have more to do before we see capitulation. One thing is certain: it has paid off to be defensive this year and to redirect portfolio allocations towards more stable positions.
Waste removal is an industry that is not very glamorous. Yet when some of the world’s leading financial institutions are major holders of these stocks, there is a good reason for it and investors would be well advised to pay close attention.
The VanEck Environmental Services ETF tracks the performance of companies involved in waste collection, transfer and disposal, recycling, soil remediation and wastewater management. EVX has outperformed major indexes this year, and several of the ETF’s constituents are hitting 52-week highs.
The two waste disposal companies we’ll discuss below are major constituents of EVX, garnering more than 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 a few percent of their respective all-time highs.
Stocks that are resilient to market corrections tend to lead when indices resume their uptrend. Let’s take a closer look at those 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. Based in Houston, TX, WM has the largest network of recycling and landfill facilities in the industry, and its natural gas truck fleet is the largest heavy-duty truck fleet in North America.
WM has built a solid record of earnings surprises, beating consensus estimates in 17 of its past 18 quarters. The company recently reported Q1 EPS earlier this week of $1.29, a surprise 15.18% from the consensus estimate of $1.12. WM stock is up more than 26% over the past year on the heels of a 4.59% surprise on average earnings over the past four quarters.
Dividend payouts and share buybacks continued to support the stock. Zacks consensus estimates for revenue and EPS for the current year are $19.04 billion (6.16% growth) and $5.43 (12.19% growth), respectively.
Waste Connections, Inc.
Waste Connections is an integrated solid waste management services company, providing collection, transfer and disposal services in exclusive and secondary markets. The company also provides intermodal services for the movement of freight and solid waste containers. WCN primarily operates in the United States and is headquartered in The Woodlands, TX.
WCN has had a remarkable track record of earnings surprises, beating estimates in every quarter for the past five consecutive years. The company recently reported fourth quarter earnings in February of $0.83, a surprise 2.47% from the consensus estimate of $0.81. WCN has produced an average earnings surprise of 4.21% over the past four quarters, boosting the stock’s return by 21% over the past year.
Analysts have revised full-year earnings estimates up 0.54% over the past 60 days, anticipating EPS of $3.73. This translates to a respectable growth rate of 15.5% over 2021. WCN’s next earnings report is due May 3.rd.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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Waste Management, Inc. (WM): Free Inventory Analysis Report
Waste Connections, Inc. (WCN): Free Inventory Analysis Report
VanEck Environmental Services ETF (EVX): ETF Research Reports
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