Top 5 waste management stocks to buy

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Top 5 waste management stocks to buy

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 Top 5 waste management stocks to buy
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Highlights

  • One of the below-mentioned waste management companies is developing a thermo-reaction process where hydrocarbon is converted into commodities like oil and gas.
  • The highest one-year stock return posted by companies on this list was 1,600 per cent.
  • The highest five-year dividend growth rate among them was 14.96 per cent.

The World Health Organisation (WHO) has been regularly emphasizing the need for better waste management, proper trash disposal, and hygiene maintenance both at homes and public places. The provision of better disposal of household and industrial garbage helps control the spread of many infectious diseases including COVID-19 to a considerable extent.

Many Canadian companies are collecting and refurbishing this domestic and industrial waste and converting them into renewable fuel and energy.

The S&P/TSX Capped Industrial index posted a Year-to-Date return of 17.16 per cent, whereas Cielo Waste Solutions Corp (CMC), one of the waste management companies, posted a YTD return of 900 per cent.

Let us look at some waste management companies on the backdrop of technological innovations on the waste management front.

  1. Waste Connections Inc. (TSX: WCN)

Waste Connections is a waste management company recycling solid waste from industrial, commercial, and residential locations. The company held outstanding shares of 260.52 million and a market cap of C$ 43.29 billion on September 9, 2021.

The stock price of the waste management company reached its 52-week high of C$ 165.68 on September 7, 2021, and closed at C$ 163.64 on this day. The stock price posted a one-year return of 27 per cent.

Waste Connections paid a quarterly dividend of US$ 0.205 to its shareholders on September 1, 2021. The five-year dividend growth rate was 14.96 per cent, and the dividend yield was 0.61 per cent on September 9, 2021. 

In the second quarter of the fiscal year 2021, the revenue posted by Waste Connections was US$ 1.53 billion, up from US$ 1.3 billion in Q2 FY20. Its adjusted net income was US$ 210.9 million or US$ 0.81 per share in Q2 FY21.

The waste management company held a price-to-book (P/B) ratio of 4.91, return on equity (ROE) of 9.13 per cent and return on assets (ROA) of 4.4 per cent.

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  1. Cielo Waste Solutions Corp (TSXV: CMC)

This waste management company refines waste collected and accumulated from construction and municipal locations, converting it into renewable fuels. Cielo Waste held a P/B ratio of 42.5 and a market cap of C$ 548.4 million on September 9.

On September 7, the stock of Cielo Waste traded close to 1,789 per cent above its 52-week low of C$ 0.045 and, it reached a price of C$ 0.84 at the close of trading on the same day.

On a year-to-date (YTD) basis, the stock price climbed 900 per cent, and over the past year, it skyrocketed 1,600 per cent.

The management of Cielo Waste commented that the company is executing a new commercial lease for its new corporate office in Calgary, Alberta. The company also acquired a 60-acre industrial site with an industrial building in Fort Saskatchewan spanning 31,750 square feet.

Cielo Waste also closed a C$ 12 million previously borrowed mortgage loan from its lenders. The net proceeds from this loan were used to purchase the industrial property.  

Also Read: 3 Canadian waste management stocks to buy & hold through 2021

  1. GFL Environmental Inc (TSX: GFL)

The dividend-paying C$ 15.14 billion market cap waste management company on September 9 caters to environment norms by providing liquid waste management services, non-hazardous solid waste management services. GFL Environmental also manages commercial and industrial liquid wastes by reselling liquid waste products.

The company paid a quarterly dividend of US$ 0.011 per share on July 30, 2021. The dividend yield was 0.11 per cent on September 9.

The valuation metrics of GFL Environmental posted a P/B ratio of 2.7 and a debt-to-equity (D/E) ratio of 1.5.

The stock price of GFL Environmental closed at C$ 44.89 on September 7. On a quarter-to-date (QTD) basis, the stock price increased by nearly 17 per cent. But it expanded by close to 81 per cent in the past year.

GFL Environmental posted revenue of C$ 1.3 billion in Q2 FY21, up 32.3 per cent Year-over-Year (YoY). Its adjusted EBITDA was C$ 353 million in the same quarter.

During the quarter, solid waste volumes grew as the restriction owing to the pandemic was gradually lifted.

Also Read: 2 TSX Waste Management Stocks To Explore Amid COVID-19 Surge

  1. Ecolomondo Corporation (TSXV: ECM)

The waste management company is in the developmental stage of designing and developing the thermo-reaction process. This reaction platform is believed to convert the waste extracted from hydrocarbon into commodities like oil, gas, etc.

Ecolomondo launched its initial public offering (IPO) on May 17, 2016, and got listed on Toronto Stock Exchange Venture  (TSXV). The company held a market cap of C$ 171.99 million (at the time of writing).

The stock price of Ecolomondo expanded by 234 per cent over the past year. It reached its 52-week high of C$ 1.01 (August 30, 2021), and on September 7, the stock traded nearly four per cent below its 52-week high price.

As per the latest quarterly report, Ecolomondo marked its progress towards the commercialization of turnkey facilities.

  1. Char Technologies Ltd (TSXV: YES)

The waste management company develops equipment for water treatment and treatment of industrial air providing biofuel. Char Technologies held a market cap of C$ 49.9 million and 67.44 million outstanding shares.

The stock price of Char Technologies reached its 52-week high of C$ 0.91 on August 13, 2021, and closed at C$ 0.74 on September 8. On this day, it traded nearly 679 per cent above its 52-week low of C$ 0.095.

The stock price skyrocketed 640 per cent over the past year and expanded by 128 per cent on a YTD basis.

On the valuation front, the waste management company held a P/B ratio of 8.22 and a D/E ratio of 0.04.

Bottom line:

These waste companies are extracting waste collected from industrial, residential, and municipal locations, converting it into renewable clean fuel, and catering to keeping up environmental norms. These renewable fuels can be used across sectors and industries.

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