Head to Head Analysis: Casella Waste Systems (CWST) and US Ecology (ECOL)

Casella Waste Systems (NASDAQ: CWST) and US Ecology (NASDAQ:ECOL) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Earnings and Valuation

This table compares Casella Waste Systems and US Ecology’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Casella Waste Systems $582.75 million 1.31 $112.99 million ($1.40) -13.00
US Ecology $478.29 million 2.28 $106.70 million $1.28 39.02

Casella Waste Systems has higher revenue and earnings than US Ecology. Casella Waste Systems is trading at a lower price-to-earnings ratio than US Ecology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Casella Waste Systems and US Ecology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Casella Waste Systems -10.01% -60.26% 3.31%
US Ecology 5.86% 11.37% 4.11%

Dividends

US Ecology pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Casella Waste Systems does not pay a dividend. US Ecology pays out 56.3% of its earnings in the form of a dividend.

Institutional and Insider Ownership

77.4% of Casella Waste Systems shares are owned by institutional investors. Comparatively, 85.6% of US Ecology shares are owned by institutional investors. 11.5% of Casella Waste Systems shares are owned by insiders. Comparatively, 1.3% of US Ecology shares are owned 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.

Volatility & Risk

Casella Waste Systems has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, US Ecology has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Casella Waste Systems and US Ecology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Casella Waste Systems 0 2 3 0 2.60
US Ecology 1 1 2 0 2.25

Casella Waste Systems presently has a consensus price target of $16.60, suggesting a potential downside of 8.79%. US Ecology has a consensus price target of $53.75, suggesting a potential upside of 7.61%. Given US Ecology’s higher possible upside, analysts clearly believe US Ecology is more favorable than Casella Waste Systems.

Summary

US Ecology beats Casella Waste Systems on 9 of the 15 factors compared between the two stocks.

About Casella Waste Systems

Casella Waste Systems, Inc. is a solid waste services company. The Company provides resource management services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services. It manages its solid waste operations on a geographic basis through two regional operating segments: Eastern and Western regions, each of which provides a range of solid waste services, and its recycling and commodity brokerage operations through its Recycling segment. Organics services, ancillary operations and industrial services are included in its Other segment. As of January 31, 2017, the Company owned and/or operated 32 solid waste collection operations, 46 transfer stations, 18 recycling facilities, nine Subtitle D landfills, four landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition (C&D) materials.

About US Ecology

US Ecology, Inc. is a provider of environmental services to commercial and government entities. The Company offers treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a range of field and industrial services. The Company operates in two business segments: Environmental Services, and Field & Industrial Services. Its Environmental Services segment provides a range of hazardous material management services, including transportation, recycling, treatment and disposal of hazardous and non-hazardous waste at Company-owned landfill, wastewater and other treatment facilities. The Company’s Field & Industrial Services segment provides packaging and collection of hazardous waste and total waste management solutions at customer sites and through its transfer facilities. Its services include on-site management, waste characterization, transportation and disposal of non-hazardous and hazardous waste.

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