Advanced Disposal Services (NYSE: ADSW) and Waste Management (NYSE:WM) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.
Waste Management pays an annual dividend of $1.86 per share and has a dividend yield of 2.3%. Advanced Disposal Services does not pay a dividend. Waste Management pays out 57.8% of its earnings in the form of a dividend. Waste Management has increased its dividend for 14 consecutive years.
This is a summary of current recommendations and price targets for Advanced Disposal Services and Waste Management, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Advanced Disposal Services||0||1||4||0||2.80|
Advanced Disposal Services presently has a consensus price target of $26.60, suggesting a potential upside of 7.34%. Waste Management has a consensus price target of $90.75, suggesting a potential upside of 11.57%. Given Waste Management’s stronger consensus rating and higher possible upside, analysts plainly believe Waste Management is more favorable than Advanced Disposal Services.
Insider & Institutional Ownership
98.3% of Advanced Disposal Services shares are held by institutional investors. Comparatively, 75.1% of Waste Management shares are held by institutional investors. 0.9% of Advanced Disposal Services shares are held by insiders. Comparatively, 0.3% of Waste Management shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Advanced Disposal Services and Waste Management’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Advanced Disposal Services||$1.51 billion||1.46||$38.30 million||$0.47||52.72|
|Waste Management||$14.49 billion||2.42||$1.95 billion||$3.22||25.26|
Waste Management has higher revenue and earnings than Advanced Disposal Services. Waste Management 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.
Volatility & Risk
Advanced Disposal Services has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Waste Management has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
This table compares Advanced Disposal Services and Waste Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Advanced Disposal Services||3.11%||5.40%||1.34%|
Waste Management beats Advanced Disposal Services on 13 of the 17 factors compared between the two stocks.
About Advanced Disposal Services
Advanced Disposal Services, Inc. provides non-hazardous solid waste collection, transfer, recycling, and disposal services. It is involved in the curbside collection of residential refuse from small carts or containers into collection vehicles for transport to a disposal/recycling site. The company also supplies commercial and industrial customers with waste containers; rents or sells compactors to large waste generators; and provides roll-off containers, as well as waste collection, transportation, and disposal services to construction and demolition sites. In addition, it offers landfill disposal services; and manages or operates recycling facilities that collect, process, and sell old corrugated cardboard, old newspaper, mixed paper, aluminum, glass, and other materials, as well as provides customer services. Further, the company engages in trucking activities; and landfill gas-to-energy operations at municipal solid waste landfills, as well as manages third-party owned landfills. It serves approximately 2.8 million residential customers; 200,000 commercial and industrial customers; and 800 municipalities in the Southeast, Midwest, and Eastern regions of the United States, as well as the Commonwealth of the Bahamas. The company was formerly known as ADS Waste Holdings, Inc. and changed its name to Advanced Disposal Services, Inc. in January 2016. Advanced Disposal Services, Inc. was founded in 2000 and is headquartered in Ponte Vedra, Florida.
About Waste Management
Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It provides collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns, develops, and operates landfill gas-to-energy facilities in the United States, as well as owns and operates transfer stations. As of December 31, 2017, the company owned or operated 244 solid waste landfills; 5 secure hazardous waste landfills; 90 MRFs; and 305 transfer stations. It also provides materials processing and commodities recycling services; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. Further, it portable self-storage and long distance moving services; fluorescent bulb and universal waste mail-back services through LampTracker program; portable restroom services under the Port-o-Let name; and street and parking lot sweeping services, as well as holds interests in oil and gas producing properties. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.
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