Reviewing Covanta Holding Corporation (CVA) & Its Rivals

Covanta Holding Corporation (NYSE: CVA) is one of 23 public companies in the “Waste Management, Disposal & Recycling Services” industry, but how does it contrast to its peers? We will compare Covanta Holding Corporation to related companies based on the strength of its risk, institutional ownership, dividends, analyst recommendations, earnings, valuation and profitability.

Risk & Volatility

Covanta Holding Corporation has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Covanta Holding Corporation’s peers have a beta of 0.65, meaning that their average stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Covanta Holding Corporation and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covanta Holding Corporation -3.68% -12.66% -1.11%
Covanta Holding Corporation Competitors -294.60% -63.27% -10.74%

Insider and Institutional Ownership

97.4% of Covanta Holding Corporation shares are owned by institutional investors. Comparatively, 53.7% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by institutional investors. 11.6% of Covanta Holding Corporation shares are owned by company insiders. Comparatively, 13.1% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Covanta Holding Corporation pays an annual dividend of C$1.00 per share and has a dividend yield of 6.4%. Covanta Holding Corporation pays out -200.0% of its earnings in the form of a dividend. As a group, “Waste Management, Disposal & Recycling Services” companies pay a dividend yield of 2.3% and pay out 200.0% of their earnings in the form of a dividend. Covanta Holding Corporation is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Covanta Holding Corporation and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Covanta Holding Corporation $1.70 billion -$4.00 million -31.10
Covanta Holding Corporation Competitors $930.23 million $32.96 million -395.01

Covanta Holding Corporation has higher revenue, but lower earnings than its peers. Covanta Holding Corporation is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings for Covanta Holding Corporation and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covanta Holding Corporation 1 0 6 0 2.71
Covanta Holding Corporation Competitors 48 319 656 17 2.62

Covanta Holding Corporation currently has a consensus price target of C$17.79, indicating a potential upside of 14.38%. As a group, “Waste Management, Disposal & Recycling Services” companies have a potential upside of 9.05%. Given Covanta Holding Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Covanta Holding Corporation is more favorable than its peers.

Summary

Covanta Holding Corporation beats its peers on 11 of the 14 factors compared.

Covanta Holding Corporation Company Profile

Covanta Holding Corporation is a holding company. The Company, through its subsidiaries, owns and operates infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The Company operates through North America segment, which consists of waste and energy services operations located primarily in the United States and Canada. Outside of North America, the Company is constructing an energy-from-waste (EfW) facility in Dublin, Ireland. The Company holds interests in an EfW facility in Italy and an infrastructure business in China, which is engaged in EfW operations. These EfW projects generate revenue from three main sources: fees charged for operating projects or processing waste received; the sale of electricity and/or steam, and the sale of ferrous and non-ferrous metals that are recovered from the waste stream as part of the EfW process.

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