Understanding how Republic Services, Inc. (NYSE:RSG) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Republic Services is doing by comparing its latest earnings with its long-term trend as well as the performance of its commercial services industry peers.
Commentary On RSG’s Past Performance
RSG’s trailing twelve-month earnings (from 31 December 2018) of US$1.0b has declined by -19% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 17%, indicating the rate at which RSG is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Republic Services has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. Furthermore, its return on assets (ROA) of 6.6% is below the US Commercial Services industry of 7.3%, indicating Republic Services’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Republic Services’s debt level, has increased over the past 3 years from 8.1% to 8.9%.
What does this mean?
Republic Services’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research Republic Services to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for RSG’s future growth? Take a look at our free research report of analyst consensus for RSG’s outlook.
- Financial Health: Are RSG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.