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1. Company Snapshot

1.a. Company Description

Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States.The company offers collection and processing of recyclable materials, collection, transfer and disposal of non-hazardous solid waste, and other environmental solutions.Its collection services include curbside collection of material for transport to transfer stations, landfills, or recycling processing centers; supply of recycling and waste containers; and renting of compactors.


In addition, the company engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill and transfer services.Further, it offers disposal of non-hazardous solid and liquid material and in-plant services, such as transportation and logistics.It serves small-container, large-container, and residential customers.


As of December 31, 2021, the company operated through 356 collection operations, 239 transfer stations, 198 active landfills, 71 recycling processing centers, 6 saltwater disposal wells, and 7 deep injection wells, as well as 3 treatment, recovery, and disposal facilities in 41 states.It also operated 77 landfill gas-to-energy and renewable energy projects and had 124 closed landfills.The company was incorporated in 1996 and is based in Phoenix, Arizona.

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1.b. Last Insights on RSG

Republic Services, Inc.'s recent performance was negatively impacted by a revenue miss and a lowered 2025 outlook, despite strong margin gains and earnings surpassing estimates. The company's Q2 earnings per share of $1.77 beat estimates, but revenue growth was muted. A $900 million investment in acquisitions during the first half of the year and a 5.5% revenue growth expectation for the full year are notable. Additionally, the company increased its quarterly dividend by approximately 8%.

1.c. Company Highlights

2. Republic Services' Q3 2025 Earnings: Strong Performance Amidst Headwinds

Republic Services reported a robust third quarter in 2025, with revenue growth of 3.3%, adjusted EBITDA growth of 6.1%, and adjusted EBITDA margin expansion of 80 basis points. The company achieved adjusted earnings per share of $1.90, surpassing estimates of $1.83, and produced $2.19 billion of adjusted free cash flow year-to-date. Organic revenue growth was driven by strong pricing, with average yield on total revenue of 4% and average yield on related revenue of 4.9%. The company's financial performance was commendable, considering the headwinds faced by its Environmental Solutions business.

Publication Date: Nov -01

📋 Highlights
  • Strong Q3 Revenue & EBITDA Growth:: Republic Services reported 3.3% revenue growth and 6.1% adjusted EBITDA growth, with $2.19B in adjusted free cash flow year-to-date.
  • EBITDA Margin Expansion:: Achieved 80 basis points of adjusted EBITDA margin expansion despite 140 bps headwind from Environmental Solutions business challenges.
  • Sustainability Progress:: Launched commercial production at Indianapolis Polymer Center, with plans for Blue Polymers facility in Q4, advancing renewable natural gas projects.
  • Capital Allocation Focus:: Invested $1B in strategic acquisitions and returned $1.13B to shareholders via dividends and buybacks year-to-date.

Operational Highlights

The Environmental Solutions business faced challenges, including softness in manufacturing activity, lower event-driven volumes, and fewer emergency response jobs, resulting in a 140 basis point headwind to total company revenue. Despite this, the company delivered over 6% growth in adjusted EBITDA and expanded adjusted EBITDA margin by 80 basis points. The company is making progress on sustainability initiatives, including the development of Polymer Centers and renewable natural gas projects.

Capital Allocation and M&A

Republic Services has invested over $1 billion in strategic acquisitions year-to-date and returned $1.13 billion to shareholders through dividends and share repurchases. The company expects to continue its M&A activity, with a focus on small- and medium-sized deals in 2025 and 2026, particularly in recycling and waste. The acquisition of a recycling facility in California provides an opportunity to expand into the West Coast Polymer Center.

Outlook and Valuation

For 2026, the company expects to maintain its long-term growth algorithm, with mid-single-digit revenue growth and faster growth in EBITDA, EPS, and free cash flow. Analysts estimate next year's revenue growth at 4.5%. With a P/E Ratio of 30.81 and an EV/EBITDA of 13.95, the market is pricing in a certain level of growth. The company's ROIC of 8.98% and ROE of 17.94% indicate a strong return on capital. The Dividend Yield is 1.14%, and the Free Cash Flow Yield is 3.89%, providing a relatively attractive return for investors.

Pricing Strategy and Labor Costs

The company feels confident about its pricing strategy, with Jon Vander Ark stating that while they've made significant progress, they still view their assets as underpriced, particularly in post-collection services. Regarding labor costs, Brian Delghiaccio noted a $16 million impact on revenue due to the union contract settlement, but expects no long-term impact on labor costs.

3. NewsRoom

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Rocky Shore Strengthens Its Gold Anchor Project by Adding Two Significant Historical Gold Resources

Dec -02

Source: globenewswire.com

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A Hearty Helping for the Holidays: Republic Services Distributes 1,000 Turkeys Across Tennessee

Nov -26

Source: prnewswire.com

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Republic Services, Inc. $RSG Shares Bought by Advisors Asset Management Inc.

Nov -26

Source: defenseworld.net

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Aviso Financial Inc. Has $4.22 Million Stock Position in Republic Services, Inc. $RSG

Nov -25

Source: defenseworld.net

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3 Stocks to Consider From the Growing Waste Removal Services Market

Nov -24

Source: zacks.com

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6,590 Shares in Republic Services, Inc. $RSG Purchased by AXQ Capital LP

Nov -22

Source: defenseworld.net

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Bank Julius Baer & Co. Ltd Zurich Has $91.83 Million Stock Position in Republic Services, Inc. $RSG

Nov -21

Source: defenseworld.net

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Allworth Financial LP Acquires 447 Shares of Republic Services, Inc. $RSG

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.70%)

6. Segments

Group 1 (Recycling & Solid Waste)

Expected Growth: 4.3%

None

Group 2 (Recycling & Solid Waste)

Expected Growth: 4.8%

Republic Services' growth is driven by increasing demand for waste management and recycling services, government regulations, and rising environmental concerns. The company's large-scale operations, efficient cost structure, and strategic acquisitions also support its expansion.

Group 3 (Environmental Solutions)

Expected Growth: 4.5%

Republic Services’ environmental and sustainability solutions drive growth, fueled by increasing adoption of recycling programs, landfill diversion, and climate change regulations.

Corporate Entities and Other

Expected Growth: 4.2%

Republic Services, Inc. is expected to benefit from increasing waste volumes, rising recycling rates, and a growing US population. Additionally, the company's growth, including its acquisition of US Ecology, will further expand its service offerings and geographic footprint.

Intercompany Revenue

Expected Growth: 3.4%

Republic Services' intercompany revenue elimination is driven by increasing waste management needs, a growing population, and urbanization. These fundamental drivers will sustain growth in the waste management industry.

7. Detailed Products

Residential Waste Collection

Republic Services provides curbside waste collection services to residential customers, including trash, recyclables, and organic waste.

Commercial Waste Collection

Republic Services offers customized waste management solutions for businesses, including dumpster rentals, recycling programs, and compactors.

Construction Waste Management

Republic Services provides specialized waste management services for construction and demolition projects, including roll-off dumpsters and recycling programs.

Recycling Services

Republic Services offers comprehensive recycling programs for paper, plastic, glass, and metal, helping communities reduce waste and conserve natural resources.

Landfill Management

Republic Services operates and manages landfills, providing a safe and environmentally responsible solution for waste disposal.

Transfer Stations

Republic Services operates transfer stations, which serve as intermediate facilities for waste processing and transportation to landfills or recycling facilities.

Organic Waste Management

Republic Services offers organic waste management services, including composting and anaerobic digestion, to convert organic waste into renewable energy and nutrient-rich soil amendments.

8. Republic Services, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Republic Services, Inc. has a low threat of substitutes due to the lack of alternative waste management services that can replace its offerings.

Bargaining Power Of Customers

Republic Services, Inc. has a medium bargaining power of customers due to the presence of some large commercial and industrial customers, but the majority of its customers are residential and have limited bargaining power.

Bargaining Power Of Suppliers

Republic Services, Inc. has a low bargaining power of suppliers due to its large scale of operations and ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

Republic Services, Inc. has a low threat of new entrants due to the high barriers to entry in the waste management industry, including the need for significant capital investments and regulatory approvals.

Intensity Of Rivalry

Republic Services, Inc. operates in a moderately competitive industry, with a few large players competing for market share, but the company's scale and operational efficiency help it to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.52%
Debt Cost 5.21%
Equity Weight 45.48%
Equity Cost 7.31%
WACC 6.16%
Leverage 119.86%

11. Quality Control: Republic Services, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TransDigm Group

A-Score: 6.4/10

Value: 3.0

Growth: 7.9

Quality: 6.7

Yield: 9.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
PACCAR

A-Score: 6.0/10

Value: 3.7

Growth: 6.7

Quality: 6.1

Yield: 8.0

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Paychex

A-Score: 5.8/10

Value: 1.8

Growth: 5.8

Quality: 9.0

Yield: 6.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Waste Management

A-Score: 5.7/10

Value: 2.4

Growth: 6.0

Quality: 6.9

Yield: 3.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

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Caterpillar

A-Score: 5.6/10

Value: 2.0

Growth: 7.0

Quality: 7.0

Yield: 3.0

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Republic Services

A-Score: 5.5/10

Value: 1.7

Growth: 6.9

Quality: 5.4

Yield: 2.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

216.53$

Current Price

216.53$

Potential

-0.00%

Expected Cash-Flows