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Operating Efficiency Aids Clean Harbors (CLH) Amid High Debt

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·3 min read
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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.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

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.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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Equifax, Inc. (EFX) : Free Stock Analysis Report

Charles River Associates (CRAI) : Free Stock Analysis Report

Cross Country Healthcare, Inc. (CCRN) : Free Stock Analysis Report

Clean Harbors, Inc. (CLH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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