Shares of Republic Services, Inc. (RSG) hit a 52-week high of $38.88 during yesterday’s trading session. However, the stock closed the session at $38.48, which reflects a solid year-to-date return of 16.8%.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has enough fundamentals that may further drive the stock upward. The stock is currently trading at a forward P/E of 19.6x and has long-term earnings growth expectation of 11.9%.
Republic Services is focused on enhancing its operations by rationalizing the cost structure, improving revenue quality and seeking growth through profitable investment opportunities. The company is also increasing its operational efficiency by converting to compressed natural gas collection vehicles and conversion of rear-loading trucks to automated-side loaders, which will reduce costs and improve profitability.
Republic Services recently announced the launch of a new mobile application called My Resource, which will aid customers to effortlessly manage their accounts. Also, it helps construction managers review the latest product offerings and identify the right products and services. The launch of such applications for smartphone users coupled with huge growth opportunities in virtualization will act as a positive catalyst for the company going forward.
The company has a healthy liquidity position and has historically returned considerable cash to shareholders through periodic dividend hikes and share repurchase. Recently, Republic Services increased its quarterly dividend by 7.7% year over year to 28 cents. The dividend hike is consistent with the historical practice of raising the quarterly payout in the mid- to high-single-digit range.
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