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Shares of Clean Harbors, Inc. CLH have gained 40.4% so far this year against the 7.4% decline of its industry.
Image Source: Zacks Investment Research
Let’s delve into the factors below that contributed to the company’s price performance:
Upbeat 2021 Guidance
Clean Harbors raised its guidance for the full year. Adjusted EBITDA is now anticipated between $620 million and $650 million compared with the prior-guided range of $560-$600 million. Net income is now anticipated between $159 million and $193 million compared with the earlier expectation of $116-$157 million. Adjusted free cash flow is now expected between $285 million and $315 million compared with the previous forecast of $230-$270 million. Net cash from operating activities is now projected between $475 million and $525 million compared with the prior projection of $415-$475 million.
Consecutive Earnings & Revenue Beat
Clean Harbors reported better-than-expected earnings and revenue performance in five of the last six quarters. While improvement in operational performance and reduction in expenses are steadily aiding the company’s bottom line, strength across Environmental Services and Safety-Kleen Sustainability Solutions segments are contributing to top-line growth.
Acquisitions Bode Well
Acquisitions have been a key growth strategy for Clean Harbors, helping it continuouslygrow in both the new and existing markets.
On Aug 4, 2021, Clean Harbors announced that it inked a deal to acquire HydroChemPSC from an affiliate of Littlejohn & Co., LLC for $1.25 billion in cash. The deal is expected to expand the company’s industrial and field services offerings, and generate significant cross-selling and margin improvement opportunities.
On Jun 29, 2021, Clean Harbors announced that it inked a deal to purchase the used motor oil collection and re-refinery business from Vertex Energy for a cash consideration of $140 million. The deal is expected to strengthen the company’s waste oil collection capabilities and increase its re-refining capacity.
Thus, acquisitions are consistently helping Clean Harbors expand its business across multiple lines of services and boosting its top line.
Zacks Rank and Stocks to Consider
Clean Harbors currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Servicessector are Charles River CRAI, BGSF Inc. BGSF and Avis Budget CAR, each carrying a Zacks Rank #2 (Buy) at present.
The long-term expected EPS (three to five years) growth rate for Charles River, BGSF and Avis Budget is pegged at 15.5%, 20% and 27.5%, respectively.
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Charles River Associates (CRAI) : Free Stock Analysis Report
Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
Clean Harbors, Inc. (CLH) : Free Stock Analysis Report
BGSF, Inc. (BGSF) : Free Stock Analysis Report
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