Clean Harbors, Inc. (CLH) is the largest hazardous waste management company in the US. They own and operate nine incinerators and eight landfills, which have limited new supply due to complex permitting processes and high construction costs. CLH has vertically integrated operations that allow them to control waste from collection through transportation and disposal. They have a proven history of managing waste properly and offer a wide range of services. CLH is currently trading at a meaningful discount to their peers, with a consensus EBITDA multiple of 10.6x for 2025. If margins were to increase another 500bps, consolidated EBITDA would be 20% above consensus and the multiple would fall to <9x. The author believes that CLH's market positioning, essential service offering, and barriers to entry warrant a higher valuation.
In related news, Waste Management Inc is close to a deal to buy Stericycle Inc for about $7 billion including debt. The deal could be announced as soon as Monday. Waste Management is one of the largest U.S. garbage collection and recycling companies, and the acquisition of Stericycle would give it exposure to the medical waste industry. Stericycle helps clinics, surgery centers, and hospitals dispose of biohazardous and pharmaceutical waste [46d40469].
Thematics Asset Management has reduced its stock position in Waste Management, Inc. (NYSE:WM) by 8.5% in the fourth quarter, selling 6,500 shares and leaving it with 70,006 shares worth $12,538,000. Other institutional investors, including Sachetta LLC, Gilfoyle & Co LLC, Pacific Capital Wealth Advisors Inc., DSM Capital Partners LLC, and Rational Advisors LLC, have also recently bought and sold shares of Waste Management. Waste Management stock opened at $200.55 on Friday, with a 50-day simple moving average of $208.00 and a 200-day simple moving average of $196.18. Waste Management reported earnings of $1.75 per share for the quarter, beating the consensus estimate of $1.52. The company had revenue of $5.16 billion during the quarter. Waste Management also announced a quarterly dividend of $0.75 per share, payable on June 21st to shareholders of record on June 7th. Several equities analysts have commented on WM shares, with Raymond James boosting their target price from $219.00 to $229.00 and giving the stock an 'outperform' rating. Waste Management, Inc. provides environmental solutions to residential, commercial, industrial, and municipal customers in the United States and Canada.