Royalty Management (NASDAQ:RMCO) vs. Waste Connections (NYSE:WCN) Critical Review

Waste Connections (NYSE:WCN) and Royalty Management (NASDAQ:RMCO) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

This table compares Waste Connections and Royalty Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waste Connections	10.86%	17.31%	6.62%
Royalty Management	-14.53%	-7.93%	-5.22%

Earnings & Valuation

This table compares Waste Connections and Royalty Management”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waste Connections	$9.76 billion	4.12	$1.08 billion	$4.15	38.49
Royalty Management	$4.95 million	8.15	-$730,000.00	($0.06)	-44.33

Waste Connections has higher revenue and earnings than Royalty Management. Royalty Management is trading at a lower price-to-earnings ratio than Waste Connections, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

86.1% of Waste Connections shares are held by institutional investors. Comparatively, 67.2% of Royalty Management shares are held by institutional investors. 0.3% of Waste Connections shares are held by insiders. Comparatively, 0.3% of Royalty Management shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Waste Connections has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, Royalty Management has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500.

Dividends

Waste Connections pays an annual dividend of $1.40 per share and has a dividend yield of 0.9%. Royalty Management pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. Waste Connections pays out 33.7% of its earnings in the form of a dividend. Royalty Management pays out -16.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Waste Connections has increased its dividend for 8 consecutive years. Waste Connections is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Waste Connections and Royalty Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Connections	0	4	14	2	2.90
Royalty Management	1	1	1	0	2.00

Waste Connections presently has a consensus price target of $200.89, suggesting a potential upside of 25.76%. Given Waste Connections’ stronger consensus rating and higher probable upside, analysts plainly believe Waste Connections is more favorable than Royalty Management.

Summary

Waste Connections beats Royalty Management on 16 of the 18 factors compared between the two stocks.

About Waste Connections

Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. Waste Connections, Inc. was founded in 1997 and is based in Woodbridge, Canada.

About Royalty Management

Royalty Management Holding Corporation provides environmental consulting and services in the United States. It is also involved in investing or purchasing assets, such as real estate and mining permits, patents, intellectual property, and emerging technologies. The company was incorporated in 2021 and is based in Fishers, Indiana.