Comparing Advanced Disposal Services (ADSW) and Sharps Compliance (SMED)

Sharps Compliance (NASDAQ: SMED) and Advanced Disposal Services (NYSE:ADSW) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sharps Compliance and Advanced Disposal Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sharps Compliance 0 0 2 0 3.00
Advanced Disposal Services 0 2 6 0 2.75

Sharps Compliance presently has a consensus target price of $7.00, indicating a potential upside of 74.13%. Advanced Disposal Services has a consensus target price of $26.00, indicating a potential upside of 9.24%. Given Sharps Compliance’s stronger consensus rating and higher probable upside, research analysts plainly believe Sharps Compliance is more favorable than Advanced Disposal Services.

Institutional and Insider Ownership

25.5% of Sharps Compliance shares are owned by institutional investors. Comparatively, 96.5% of Advanced Disposal Services shares are owned by institutional investors. 20.4% of Sharps Compliance shares are owned by insiders. Comparatively, 1.2% of Advanced Disposal Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Sharps Compliance and Advanced Disposal Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sharps Compliance $38.19 million 1.69 -$1.29 million ($0.02) -201.00
Advanced Disposal Services $1.40 billion 1.50 -$30.40 million ($0.28) -85.00

Sharps Compliance has higher earnings, but lower revenue than Advanced Disposal Services. Sharps Compliance 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.

Profitability

This table compares Sharps Compliance and Advanced Disposal Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sharps Compliance -0.65% -0.98% -0.71%
Advanced Disposal Services 0.89% 1.68% 0.40%

Summary

Advanced Disposal Services beats Sharps Compliance on 7 of the 13 factors compared between the two stocks.

Sharps Compliance Company Profile

Sharps Compliance Corp. is a provider of waste management services, including medical, pharmaceutical and hazardous. The Company’s solutions include Sharps Recovery System, TakeAway Medication Recovery System, MedSafe, Route-Based Pickup Service, TakeAway Recycle System, ComplianceTRAC, Universal Waste Shipback Systems and Other Solutions. The Company’s solutions facilitate the collection, containment, transportation and treatment of various types of healthcare-related materials, including hypodermic needles, lancets and other devices or objects used to puncture or lacerate the skin, or sharps, hazardous waste and unused consumer dispensed medications and over-the-counter drugs. It assists its customers in determining which of its solution offerings fit for the collection, containment, return transportation and treatment of medical waste, used healthcare materials, pharmaceutical waste, hazardous waste and unused dispensed medications. It provides tracking and reporting tools.

Advanced Disposal Services Company Profile

Advanced Disposal Services, Inc. is an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under exclusive arrangements. The Company’s segments include South, East, Midwest and Corporate. As of December 31, 2016, the Company had its presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, served approximately 2.7 million residential customers and over 200,000 commercial and industrial (C&I) customers through its network of 90 collection operations, 72 transfer stations, 21 owned or operated recycling facilities and 39 owned or operated active landfills. The Company’s vertically integrated environmental services operations can be classified into three lines of business: collection services, disposal services and recycling services. The disposal services include transfer stations and landfills.

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