Critical Review: Veolia Environnement (VEOEY) vs. Republic Services (RSG)

Veolia Environnement (OTCMKTS: VEOEY) and Republic Services (NYSE:RSG) are both large-cap utilities companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

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This table compares Veolia Environnement and Republic Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veolia Environnement N/A N/A N/A
Republic Services 12.73% 10.61% 3.94%

Valuation and Earnings

This table compares Veolia Environnement and Republic Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veolia Environnement $28.38 billion 0.47 $453.66 million $1.22 19.40
Republic Services $10.04 billion 2.17 $1.28 billion $2.43 27.09

Republic Services has lower revenue, but higher earnings than Veolia Environnement. Veolia Environnement is trading at a lower price-to-earnings ratio than Republic Services, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.4% of Veolia Environnement shares are held by institutional investors. Comparatively, 61.0% of Republic Services shares are held by institutional investors. 1.0% of Veolia Environnement shares are held by insiders. Comparatively, 0.3% of Republic Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Veolia Environnement pays an annual dividend of $0.71 per share and has a dividend yield of 3.0%. Republic Services pays an annual dividend of $1.38 per share and has a dividend yield of 2.1%. Veolia Environnement pays out 58.2% of its earnings in the form of a dividend. Republic Services pays out 56.8% 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. Republic Services has increased its dividend for 8 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Veolia Environnement and Republic Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veolia Environnement 0 2 3 1 2.83
Republic Services 0 6 4 0 2.40

Republic Services has a consensus target price of $69.86, suggesting a potential upside of 6.10%. Given Republic Services’ higher probable upside, analysts clearly believe Republic Services is more favorable than Veolia Environnement.

Volatility and Risk

Veolia Environnement has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Republic Services has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Summary

Republic Services beats Veolia Environnement on 12 of the 18 factors compared between the two stocks.

Veolia Environnement Company Profile

Veolia Environnement S.A. provides a range of environmental services worldwide. It operates through Water, Waste, and Energy businesses. The Water business integrates drinking water and wastewater activities, such as water distribution and collection, water and wastewater treatment and supply, industrial process water, wastewater sludge management, and recycling and reuse solutions, as well as construction of water treatment plant. It also manufactures water treatment equipment and technologies. The Waste business collects, sorts, processes, disposes, and recycles household, commercial, and industrial wastes. The Energy business produces renewable energy comprising heat and electricity produced from waste and biomass; heat from data centers, wastewater calories, and industrial companies; and develops a range of energy management activities, including heating and cooling networks, thermal and multi-technical services, industrial utilities, installation and maintenance of production equipment, and integration services for the management of buildings. The company was formerly known as Vivendi Environnement and changed its name to Veolia Environnement S.A. in 2003. Veolia Environnement S.A. was founded in 1853 and is headquartered in Paris, France.

Republic Services Company Profile

Republic Services, Inc., together with its subsidiaries, provides non-hazardous solid waste collection, transfer, recycling, disposal, and energy services for small-container, large-container, municipal and residential, and energy services customers in the United States and Puerto Rico. The company's collection services include curbside collection of waste for transport to transfer stations; supply of waste containers; and renting of compactors. It is also involved in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; temporary waste collection services; and provision of landfill services. As of December 31, 2017, the company operated through 343 collection operations, 204 transfer stations, 195 active landfills, 90 recycling centers, and 11 salt water disposal wells, as well as 7 treatment, recovery, and disposal facilities in 40 states and Puerto Rico. It also operated 68 landfill gas and renewable energy projects and had 124 closed landfills. The company was founded in 1996 and is based in Phoenix, Arizona.

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