Republic Services (NYSE: RSG) and Tetra Tech (NASDAQ:TTEK) are both mid-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
This table compares Republic Services and Tetra Tech’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Republic Services and Tetra Tech’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Republic Services||$9.71 billion||2.22||$2.72 billion||$1.95||32.81|
|Tetra Tech||$2.03 billion||1.18||$216.70 million||$1.97||21.22|
Republic Services has higher revenue and earnings than Tetra Tech. Tetra Tech is trading at a lower price-to-earnings ratio than Republic Services, indicating that it is currently the more affordable of the two stocks.
Republic Services pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. Tetra Tech pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Republic Services pays out 65.6% of its earnings in the form of a dividend. Tetra Tech pays out 20.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tetra Tech has increased its dividend for 7 consecutive years.
This is a summary of current ratings and price targets for Republic Services and Tetra Tech, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Republic Services currently has a consensus target price of $69.50, suggesting a potential upside of 8.63%. Tetra Tech has a consensus target price of $49.57, suggesting a potential upside of 18.59%. Given Tetra Tech’s stronger consensus rating and higher possible upside, analysts plainly believe Tetra Tech is more favorable than Republic Services.
Risk and Volatility
Republic Services has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Tetra Tech has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.
Insider and Institutional Ownership
61.7% of Republic Services shares are held by institutional investors. Comparatively, 85.0% of Tetra Tech shares are held by institutional investors. 0.4% of Republic Services shares are held by insiders. Comparatively, 3.8% of Tetra Tech shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Tetra Tech beats Republic Services on 11 of the 17 factors compared between the two stocks.
Republic Services Company Profile
Republic Services, Inc. is a provider of non-hazardous solid waste collection, transfer, disposal, recycling and energy services. The Company’s segments include Group 1, Group 2 and Corporate entities. Its Group 1 and Group 2 segments provide integrated waste management services. Group 1 consists of geographic areas located in the western and portions of the mid-western United States. Group 2 consists of geographic areas located in Texas, the southeastern and portions of the mid-western United States, and the eastern seaboard of the United States. As of December 31, 2016, it operated in 39 states and Puerto Rico through 333 collection operations, 204 transfer stations, 192 active landfills, 64 recycling centers, seven treatment, recovery and disposal facilities, and 10 salt water disposal wells. As of December 31, 2016, it also operated 71 landfill gas and renewable energy projects and had post-closure responsibility for 124 closed landfills.
Tetra Tech Company Profile
Tetra Tech, Inc. is a provider of consulting, engineering, program management, construction management, and technical services. The Company’s segments include Water, Environment and Infrastructure (WEI), Resource Management and Energy (RME), and Remediation and Construction Management (RCM). The WEI segment provides consulting and engineering services. The RME segment provides consulting and engineering services across the world for a range of resource management and energy needs. The Company includes wind-down of its non-core construction activities in the RCM segment. Its solutions span the entire life cycle of consulting and engineering projects and include applied science, research and technology, engineering, design, construction management, operations and maintenance, and information technology. It provides its services to a diverse base of international, the United States commercial, the United Sates federal clients.
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