Analyzing Advanced Disposal Services (ADSW) and Sharps Compliance (SMED)

Advanced Disposal Services (NYSE: ADSW) and Sharps Compliance (NASDAQ:SMED) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Risk & Volatility

Advanced Disposal Services has a beta of -0.67, meaning that its stock price is 167% less volatile than the S&P 500. Comparatively, Sharps Compliance has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Advanced Disposal Services and Sharps Compliance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Disposal Services -1.61% 5.84% 1.41%
Sharps Compliance -0.65% -0.98% -0.71%

Institutional and Insider Ownership

96.5% of Advanced Disposal Services shares are owned by institutional investors. Comparatively, 25.5% of Sharps Compliance shares are owned by institutional investors. 1.2% of Advanced Disposal Services shares are owned by insiders. Comparatively, 20.4% of Sharps Compliance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Advanced Disposal Services and Sharps Compliance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Disposal Services $1.40 billion 1.45 -$30.40 million ($0.28) -82.25
Sharps Compliance $38.19 million 1.59 -$1.29 million ($0.01) -379.00

Sharps Compliance has lower revenue, but higher earnings than Advanced Disposal Services. Sharps Compliance is trading at a lower price-to-earnings ratio than Advanced Disposal Services, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Advanced Disposal Services and Sharps Compliance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Disposal Services 0 2 6 0 2.75
Sharps Compliance 0 0 2 0 3.00

Advanced Disposal Services presently has a consensus price target of $26.00, indicating a potential upside of 12.90%. Sharps Compliance has a consensus price target of $7.00, indicating a potential upside of 84.70%. Given Sharps Compliance’s stronger consensus rating and higher possible upside, analysts clearly believe Sharps Compliance is more favorable than Advanced Disposal Services.

Summary

Sharps Compliance beats Advanced Disposal Services on 8 of the 13 factors compared between the two stocks.

Advanced Disposal Services Company Profile

Advanced Disposal Services, Inc. is an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under exclusive arrangements. The Company’s segments include South, East, Midwest and Corporate. As of December 31, 2016, the Company had its presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, served approximately 2.7 million residential customers and over 200,000 commercial and industrial (C&I) customers through its network of 90 collection operations, 72 transfer stations, 21 owned or operated recycling facilities and 39 owned or operated active landfills. The Company’s vertically integrated environmental services operations can be classified into three lines of business: collection services, disposal services and recycling services. The disposal services include transfer stations and landfills.

Sharps Compliance Company Profile

Sharps Compliance Corp. is a provider of waste management services, including medical, pharmaceutical and hazardous. The Company’s solutions include Sharps Recovery System, TakeAway Medication Recovery System, MedSafe, Route-Based Pickup Service, TakeAway Recycle System, ComplianceTRAC, Universal Waste Shipback Systems and Other Solutions. The Company’s solutions facilitate the collection, containment, transportation and treatment of various types of healthcare-related materials, including hypodermic needles, lancets and other devices or objects used to puncture or lacerate the skin, or sharps, hazardous waste and unused consumer dispensed medications and over-the-counter drugs. It assists its customers in determining which of its solution offerings fit for the collection, containment, return transportation and treatment of medical waste, used healthcare materials, pharmaceutical waste, hazardous waste and unused dispensed medications. It provides tracking and reporting tools.

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