Covanta Holding Corporation (NYSE: CVA) and Stericycle (NASDAQ:SRCL) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

90.9% of Covanta Holding Corporation shares are held by institutional investors. Comparatively, 94.6% of Stericycle shares are held by institutional investors. 11.6% of Covanta Holding Corporation shares are held by company insiders. Comparatively, 3.3% of Stericycle shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Covanta Holding Corporation -1.41% -9.81% -0.96%
Stericycle -0.07% 14.35% 5.79%

Analyst Ratings

This is a breakdown of recent ratings for Covanta Holding Corporation and Stericycle, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covanta Holding Corporation 1 1 6 0 2.63
Stericycle 3 5 6 0 2.21

Covanta Holding Corporation presently has a consensus price target of $17.19, suggesting a potential upside of 25.46%. Stericycle has a consensus price target of $80.83, suggesting a potential upside of 12.16%. Given Covanta Holding Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Covanta Holding Corporation is more favorable than Stericycle.

Valuation and Earnings

This table compares Covanta Holding Corporation and Stericycle’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Covanta Holding Corporation $1.71 billion 1.04 $296.00 million ($0.19) -72.10
Stericycle $3.61 billion 1.70 $777.58 million ($0.26) -277.19

Stericycle has higher revenue and earnings than Covanta Holding Corporation. Stericycle is trading at a lower price-to-earnings ratio than Covanta Holding Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 7.3%. Stericycle does not pay a dividend. Covanta Holding Corporation pays out -526.3% of its earnings in the form of a dividend.

Risk & Volatility

Covanta Holding Corporation has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Stericycle has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

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.

Stericycle Company Profile

Stericycle, Inc. is a business-to-business services provider. The Company focuses on regulated and compliance solutions for healthcare, retail, and commercial businesses. The Company’s segments include Domestic and Canada Regulated Waste and Compliance Services (RCS), Domestic Communication and Related Services (CRS), International RCS and All other. The Domestic and Canada RCS and International RCS segments include medical waste disposal, pharmaceutical waste disposal, hazardous waste management, sustainability solutions for expired or unused inventory, secure information destruction of documents and e-media, training and consulting through its Steri-Safe and Clinical Services programs, and other regulatory compliance services. The Domestic CRS segment consists of inbound/outbound communication, automated patient reminders, online scheduling, notifications, product retrievals, product returns and quality audits.

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