RSG to WM: Five stocks to watch on this World Environment Day

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Highlights 
  • Republic Services, Inc. (NYSE: RSG) provides solid waste disposal services.
  • Tetra Tech, Inc. (NASDAQ: TTEK) has partnered with Cognite to develop industrial AI solutions in the energy utility segment. 
  • Waste Management, Inc. (NYSE: WM) stock rose 13.16% in a year. Its price to earnings (P/E) ratio is 34.92, and its dividend yield is 1.61%. 

World Environment Day was first observed on June 5, 1972, to highlight the negative impact of human activities on the planet and call for remedial measures. Drought, floods, and pollution are no longer rare, unusual phenomena but climate emergencies. Reckless human actions have adversely impacted our fragile environment. Thus, the UN calls for concerted efforts of all stakeholders to mitigate climate change. The UN General Assembly has designated June 5 as World Environment Day, being observed under different themes since 1972. 

This year’s theme is “collective, transformative action on a global scale to celebrate, protect and restore our planet”. In the business sphere, many firms are today engaged in improving their production practices, such as offsetting carbon emissions, waste management, etc., to save the environment. Here, we discuss five environmental stocks to explore this year.  

Republic Services, Inc. (NYSE: RSG)

Market Capitalization: US$42.28 billion

Republic Services is one of the largest US companies providing solid waste disposal services. It operates around 186 landfills and over 200 transfer stations. The company serves residential, industrial, and commercial markets and runs recycling operations in North America.

The RSG stock has a price to earnings (P/E ratio) of 31.72 and a forward P/E for one year of 28.72. Its dividend yield is 1.34%, with an annualized dividend of US$1.84. 

Last month, it was named in the 3BL Media's list of 100 Best Corporate Citizens for the third consecutive year based on ESG performance.

The company earned US$2.97 billion in revenue for the quarter ended March 31, 2022, compared to US$2.6 billion in the year-ago period.

It posted a net income of US$351.9 million or US$1.11 per diluted share compared to US$296.4 million or US$0.93 per diluted share in the March quarter of 2021.

Its stock traded in the range of US$145.98 to US$106.46 in the last 52 weeks. It gained 23.50% in one year at the closing price of US$133.84 on May 31, 2022.

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Tetra Tech, Inc. (NASDAQ: TTEK)

Market Capitalization: US$7.25 billion

Tetra Tech Inc. provides consulting and engineering services focused on sustainable infrastructure, renewable energy, environment, water, and international development. 

Its operating segments are Government Services Group (GSG) and Commercial/International Services Group (CIG).  

TTEK stock has a price to earnings (P/E) ratio of 28.75 and the forward P/E for one year of 30.61. Its dividend yield is 0.68%, with an annualized dividend of US$0.92. 

In May this year, it partnered with Cognite, a global industrial software-as-a-service (SaaS) company, to develop industrial AI solutions in the energy utility segment.

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For the quarter ended April 3, 2022, the company’s revenue was US$852.7 million compared to US$754.8 million in the corresponding period in the previous year.

It posted a net income of US$53.05 million or US$0.98 per diluted share compared to US$45.5 million or US$0.83 per diluted share in the same quarter in 2021.

Its stock traded in the range of US$192.91 to US$116.01 in the last 52 weeks. It rose 13.06% in one year at the closing price of US$134.97 on May 31, 2022.

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Waste Management, Inc. (NYSE: WM)

Market Capitalization: US$65.8 billion

Waste Management is the integrated provider of traditional solid waste management services in the US. It operates around 268 active landfills and about 350 transfer stations and serves industrial, commercial, and residential end markets.

The WM stock has a price to earnings (P/E) ratio of 34.92 and the forward P/E for one year of 28.56. Its dividend yield is 1.61%, with an annualized dividend of US$2.60. 

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The company earned a net income of US$513 million or US$1.23 per diluted share on the revenue of US$4.66 billion for the quarter ended March 31, 2022.

While for the same quarter in 2021, it earned a net income of US$421 million or US$0.99 per share diluted on the revenue of US$4.11 billion.

Its stock traded in the range of US$170.18 to US$136.97 in the last 52 weeks. It gained 13.16% in one year at the closing price of US$158.51 on May 31, 2022.

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Casella Waste Systems, Inc. (NASDAQ: CWST)

Market Capitalization: US$3.72 billion

Casella Waste Systems Inc provides resource management services to industrial, commercial, residential, and municipal customers. This solid waste removal company offers recycling, organics, collection, energy, landfills, and special waste management services.  

CWST stock has a price to earnings (P/E) ratio of 90.0 and the forward P/E for one year of 69.50. 

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For the quarter ended March 31, 2022, its revenue and net income were US$234 million and US$4.19 million, respectively. The revenue and net income were US$189.5 million and US$4.31 million, respectively, for the March quarter of 2021.

Its stock traded in the range of US$92.75 to US$62.47 in the last 52 weeks. The stock rose 6.76% in one year at the closing price of US$71.58 on May 31, 2022.

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Clean Harbors, Inc. (NYSE: CLH)

Market Capitalization: US$5.17 billion

Clean Harbor Inc provides environmental and energy services. The company offers part cleaning and related services to industrial, commercial, and automotive customers. 

Its operating segments are Environmental Services and Safety-Kleen. CLH stock has a P/E ratio of 22.88 and the forward P/E for one year of 22.04. 

For the three months ended March 31, 2022, the company reported revenue of US$1.17 billion compared to US$0.808 billion in the same quarter in 2021. 

Its net income came in at US$45.3 million or US$0.83 per share diluted compared to US$21.7 million or US$0.39 per share diluted in March quarter previous year.

Its stock traded in the range of US$118.89 to US$85.67 in the last 52 weeks. CLH stock remained at the same price after one year and closed at US$93.4 on May 31, 2022.

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Bottom line:

Due to climate change, businesses face interrupted supply chains, higher operating and insurance costs, etc. People are now aware of the harmful effects of human activities on the environment. Hence, sustainable, eco-friendly business models and policies are being formulated. However, investors must apply due diligence before investing in stocks.


 


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