Covanta (NYSE: CVA) is one of 20 publicly-traded companies in the “Waste Management, Disposal & Recycling Services” industry, but how does it compare to its rivals? We will compare Covanta to related companies based on the strength of its earnings, risk, valuation, institutional ownership, analyst recommendations, profitability and dividends.
Institutional and Insider Ownership
94.8% of Covanta shares are owned by institutional investors. Comparatively, 52.2% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by institutional investors. 11.6% of Covanta shares are owned by insiders. Comparatively, 12.3% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Covanta has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Covanta’s rivals have a beta of 0.62, indicating that their average share price is 38% less volatile than the S&P 500.
Covanta pays an annual dividend of $1.00 per share and has a dividend yield of 5.9%. Covanta pays out -200.0% of its earnings in the form of a dividend. As a group, “Waste Management, Disposal & Recycling Services” companies pay a dividend yield of 1.8% and pay out 101.5% of their earnings in the form of a dividend. Covanta is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
This is a summary of current ratings and price targets for Covanta and its rivals, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Covanta presently has a consensus target price of $17.64, indicating a potential upside of 4.40%. As a group, “Waste Management, Disposal & Recycling Services” companies have a potential upside of 4.54%. Given Covanta’s rivals higher probable upside, analysts clearly believe Covanta has less favorable growth aspects than its rivals.
Earnings and Valuation
This table compares Covanta and its rivals gross revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Covanta||$1.70 billion||-$4.00 million||-33.80|
|Covanta Competitors||$850.65 million||$28.19 million||172.30|
Covanta has higher revenue, but lower earnings than its rivals. Covanta is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
This table compares Covanta and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Covanta beats its rivals on 10 of the 15 factors compared.
Covanta Holding Corporation is a holding company. The Company, through its subsidiaries, owns and operates infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The Company operates through North America segment, which consists of waste and energy services operations located primarily in the United States and Canada. Outside of North America, the Company is constructing an energy-from-waste (EfW) facility in Dublin, Ireland. The Company holds interests in an EfW facility in Italy and an infrastructure business in China, which is engaged in EfW operations. These EfW projects generate revenue from three main sources: fees charged for operating projects or processing waste received; the sale of electricity and/or steam, and the sale of ferrous and non-ferrous metals that are recovered from the waste stream as part of the EfW process.
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