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Clean Harbors, Inc. CLH is currently benefiting from a diverse customer base and improving operating efficiency.
The company recently reported first-quarter 2021 adjusted earnings per share of 42 cents that outpaced the Zacks Consensus Estimate by 61.5% and increased 50% year over year. Total revenues of $808.1 million beat the consensus mark by 2.7%, but declined 6% year over year
Notably, the stock has gained 45.7% in the past year compared with 26% rally of the industry it belongs to.
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Dversified Customer Base & Improved Efficiency Are Positives
Clean Harbors has a diversified customer base ranging from Fortune 500 companies to midsize as well as small public and private entities. These firms provide it with stable and recurring sources of revenues. The company continues to make capital investments to enhance its quality and comply with government and local regulations.
Further, Clean Harbors focuses on improving its efficiency and lowering operating costs through advanced technology, process efficiencies and stringent cost management. It has been managing internalization of maintenance costs, procurement as well as supply chain improvements and site consolidations to improve efficiency, since last year.
Debt Woes Stay
Clean Harbors has a debt-laden balance sheet. The company’s cash and cash equivalent of $571 million at the end of first-quarter 2021 was well below the total debt level of $1.56 billion, underscoring that it doesn’t have enough cash to meet this debt burden.
Zacks Rank and Other Stocks to Consider
Clean Harbors currently carries a Zacks Rank #2 (Buy).
Investor interested in the broader Zacks Business Services sector can also consider stocks like Equifax Inc. EFX, Cross Country Healthcare CCRN and Charles River Associates CRAI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for Equifax, Cross Country Healthcare and Charles River is pegged at 14%, 10.5% and 15.5%, respectively.
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