Is Republic Services a Good Investment?

PHOTO CREDIT: Republic Services

OVERVIEW

Republic Services Incorporation is a company based in the United States. The company offers a wide range of solid waste services to individuals, companies, and government entities across the United States and Puerto Rico. As of December 2020, the company operates 220 transfer stations and 186 landfills across these markets. The company was founded in 1996.

Why You Should?

  1. Republic Services is a great reopening play in an investor’s portfolio. The company saw a drop in demand as the pandemic shut down venues like restaurants, sporting events, and schools. However, as this pandemic comes to an end, the company will see strong growth once again.
  2. Republic Services is a safe investment option due to the essential nature of the services that it offers. Individuals, governments, and companies will continue to pay for essential utilities like garbage and solid waste services in order to maintain a high quality of life. This will help the company navigate through tough economic times and will also benefit investors.
  3. In 2018, China stopped taking many kinds of plastic and paper from foreign countries like the United States. This caused the price of these commodities to tank, hurting Republic Services’ recycling business. However, over the past couple of years, recycling has been a growing domestic industry, something that will help the company process recycling for a good profit.
  4. As the population of the United States continues to increase and as many other events take place (like this reopening from COVID), the amount of trash will continue to grow, something that will increase the demand for solid waste services. This increase of trash produced in the long-term will further drive results for the company and will also benefit investors in the company.
  5. A booming housing market will benefit the company and its investors. over the past year, the housing market across the United States has skyrocketed, causing home developers across the country to build more homes. This has caused a rise in demand for commercial solid waste services from the construction industry. As this trend continues, it will benefit the company.
  6. The Biden administration might also positively impact the company. Biden will look to sign massive trade deals with our allies and countries like China. He might be able to sign a deal that includes the sale of paper and plastic commodities to other countries. This will benefit the company and its investors.

Why You Should Not?

  1. The solid waste industry is extremely competitive. Along with private competitors like Waste Management and Waste Connections, the company also has to compete with publicly operated solid waste companies. This competition might hurt the company and its investors in the future.

MY OPINION

I think that Republic Services is a great long-term investment due to its position as a good reopening play, s safe investment option, a strengthening recycling business, more trash created, a booming housing market, as well as some positive impacts from the Biden administration. however, tough competition might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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