2 Best Waste Management Stocks to Own in 2022: Clean Harbors and Heritage-Crystal Clean The need for advanced waste management has garnered immense attention from big market players amid increasing ESG investment trends. The sector is necessary to achieve sustainable growth. Thus, we think...
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The need for advanced waste management has garnered immense attention from big market players amid increasing ESG investment trends. The sector is necessary to achieve sustainable growth. Thus, we think it could be wise to own quality waste management stocks Clean Harbors (CLH) and Heritage-Crystal Clean (HCCI) in 2022. Read on.
Sustainable development has been one of the primary aims of businesses worldwide amid increased concerns about climate change and a focus on ESG investments. Waste management is one of the critical aspects of sustainable development. During the pandemic, the importance of waste management accelerated owing to poor maintenance and disposal of healthcare waste. According to the WHO, most of the 87,000 tonnes of personal protective equipment (PPE) procured between March 2020 - November 2021 ended up as waste.
Furthermore, industrial waste has multiplied considerably over time. According to DataM Intelligence, the global industrial waste management market size is estimated to grow at a 9.6% CAGR during the period 2021 - 2028. Because the worldwide population continues to rise, more waste generation will need to be managed. This is predicted to bring about significant benefits for the waste management industry.
So, we think it could be wise to add fundamentally strong and quality waste management stocks Clean Harbors, Inc. (CLH) and Heritage-Crystal Clean, Inc (HCCI) to one's portfolio now.
Clean Harbors, Inc. (CLH)
CLH in Norwell, Mass., provides environmental and industrial services in North America. The company operates through two segments: Environmental Services and Safety-Kleen Sustainability Solutions.
On Feb. 23, 2022, Alan S. McKim, Chairman, President, and CEO, said, "Favorable market dynamics for both our operating segments drove our performance–including high demand for hazardous waste disposal, industrial services and re-refined products. This positive market environment, combined with strong execution by our entire team, enabled us to exceed our guidance for both adjusted EBITDA and adjusted free cash flow. With contributions from HydroChemPSC ("HPC"), which we acquired in October, we delivered more than $1 billion in quarterly revenue for the first time in our company's history."
For the fourth quarter, ended Dec. 31, 2021, CLH's revenues came in at $1.12 billion, up 40.6% year-over-year. Its adjusted net income was $48.56 million, up 38.6% year-over-year, while its adjusted EPS came in at $0.89, up 41.3% year-over-year.
Analysts expect CLH's revenue to increase 17.5% to $4.47 billion in 2022. Its EPS is estimated to increase 30% per annum for the next five years. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 2.3% in price to close yesterday's trading session at $91.22.
CLH's POWR Ratings reflect its solid prospects. The company has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
In addition, it has a B grade for Growth. CLH is ranked #6 of 17 stocks in the B-rated Waste Disposal industry. Click here to see the additional POWR Ratings for CLH (Value, Stability, Sentiment, Momentum, and Quality).
Heritage-Crystal Clean, Inc (HCCI)
HCCI, through its subsidiary, Heritage-Crystal Clean, LLC, provides parts cleaning, hazardous and non-hazardous waste, and used oil collection services to small- and mid-sized customers in the industrial and vehicle maintenance sectors in the United States and Canada. HCCI is based in Elgin, Ill.
On Oct. 20, 2021, President and CEO Brian Recatto said, "We are very excited with our overall results for the third quarter. We are also pleased that both segments again made positive contributions to help achieve record-setting results for the fourth straight quarter."
HCCI's total revenues increased 41.4% year-over-year to $123.17 million for the third quarter ended September 11, 2021. Its net income came in at $18.51 million, up 367.6% year-over-year, while its EPS came in at $0.79, up 364.7% year-over-year.
Analysts expect HCCI's revenue to increase 4.1% year-over-year to $526.48 million in 2022. Its EPS is expected to grow 15% per annum for the next five years. The stock closed yesterday's trading session at $26.93.
HCCI's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value, Sentiment, and Quality. Within the Waste Disposal industry, it is ranked #1. Click here to see the additional POWR Ratings for HCCI (Momentum and Stability).
CLH shares were trading at $91.67 per share on Friday morning, up $0.45 (+0.49%). Year-to-date, CLH has declined -8.12%, versus a -9.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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