Republic Services is engaged as a provider of non-hazardous solid waste collection, transfer station, recycling and disposal services. As of Dec 31 2013, Co. provided non-hazardous solid waste collection services for commercial, industrial, municipal and residential customers through 336 collection operations in 39 states and Puerto Rico. In addition, Co. owned or operated 199 transfer stations, 190 active solid waste landfills and 69 recycling centers. Co. also operated 69 landfill gas and renewable energy projects. Co. manages its operations through three geographic regions: East, Central, and West, which Co. has identified as its reportable segments.
In our opinion RSG has an economic moat do to it landfill assets. In the waste disposal industry, landfill ownership is a formidable barrier to entry, as EPA regulations support high fixed costs for landfill siting, development, operation, and monitoring.
Outlook remains solid as RSG. Republic's healthy free cash flow and sound balance sheet, we would not be surprised to see more accretive deals in 2015 and beyond. Strategic acquisitions are big part of RSG’s growth plan. RSG appears to be trading at fair value. RSG is a solid long-term defensive play with a good dividend.
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Command on the entire waste management value chain
Varied customer base
Strong operating platform
Lack of geographical diversification
Federal and state regulatory constraints
Fluctuations in prices for recycled commodities
Increase in demand for environmental services
Expansion of recycling capabilities Expansion of business
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The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.