Investment Q&A

Most companies in the waste management industry have done well for shareholders over the years due to favourable industry competitive dynamics (regional oligopoly), strong pricing power and high predictability. As a result, companies in the industry tend to trade at premium valuations.

In Q4-2024, CLH’s result was decent; the company reported a revenue growth of 7% to $1.43B, in line with expectations. EPS came at $1.55 for the quarter, which beats an estimate of $1.33. The results were good but largely in line with expectations. CLH runs a moderately leveraged balance sheet with net debt/EBITDA of 1.8x, a conservative level compared to the industry’s average of at least 3x. We think CLH is a solid name to own, that being said, we prefer other companies in the industry that balance capital returns (dividends and buyback) and acquisitions, like WM, WCN, and RSG. But we would still be OK owning it in a combo with WCN.