Casella Waste Systems (NASDAQ: CWST) and Heritage-Crystal Clean (NASDAQ:HCCI) are both small-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Insider and Institutional Ownership

76.3% of Casella Waste Systems shares are held by institutional investors. Comparatively, 52.8% of Heritage-Crystal Clean shares are held by institutional investors. 11.5% of Casella Waste Systems shares are held by insiders. Comparatively, 14.8% of Heritage-Crystal Clean shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Casella Waste Systems and Heritage-Crystal Clean’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Casella Waste Systems $582.75 million 1.20 $112.99 million ($1.40) -11.90
Heritage-Crystal Clean $355.46 million 1.20 $41.31 million $0.76 24.74

Casella Waste Systems has higher revenue and earnings than Heritage-Crystal Clean. Casella Waste Systems is trading at a lower price-to-earnings ratio than Heritage-Crystal Clean, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Casella Waste Systems and Heritage-Crystal Clean’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Casella Waste Systems -34.85% N/A -35.58%
Heritage-Crystal Clean 8.09% 13.29% 9.66%

Analyst Ratings

This is a breakdown of current ratings and price targets for Casella Waste Systems and Heritage-Crystal Clean, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Casella Waste Systems 0 2 3 0 2.60
Heritage-Crystal Clean 0 1 4 0 2.80

Casella Waste Systems presently has a consensus target price of $16.60, suggesting a potential downside of 0.36%. Heritage-Crystal Clean has a consensus target price of $20.40, suggesting a potential upside of 8.51%. Given Heritage-Crystal Clean’s stronger consensus rating and higher possible upside, analysts plainly believe Heritage-Crystal Clean is more favorable than Casella Waste Systems.

Risk & Volatility

Casella Waste Systems has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Heritage-Crystal Clean has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.

Summary

Heritage-Crystal Clean beats Casella Waste Systems on 9 of the 13 factors compared between the two stocks.

About Casella Waste Systems

Casella Waste Systems, Inc. is a solid waste services company. The Company provides resource management services to residential, commercial, municipal and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services. It manages its solid waste operations on a geographic basis through two regional operating segments: Eastern and Western regions, each of which provides a range of solid waste services, and its recycling and commodity brokerage operations through its Recycling segment. Organics services, ancillary operations and industrial services are included in its Other segment. As of January 31, 2017, the Company owned and/or operated 32 solid waste collection operations, 46 transfer stations, 18 recycling facilities, nine Subtitle D landfills, four landfill gas-to-energy facilities and one landfill permitted to accept construction and demolition (C&D) materials.

About Heritage-Crystal Clean

Heritage-Crystal Clean, Inc. provides full-service parts cleaning, containerized waste management, used oil collection, vacuum truck services and antifreeze recycling. The Company owns and operates a used oil re-refinery. The Company operates through two segments: Environmental Services and Oil Business. The Company provides hazardous and non-hazardous waste services to small and mid-sized customers in both the manufacturing and vehicle maintenance sectors. The Environmental Services segment consists of the Company’s parts cleaning, containerized waste management, vacuum truck services, used antifreeze recycling activities and field services. The Oil Business segment consists of used oil collection activities, sale of recycled fuel oil, re-refining activities, and oil filter removal and disposal services. Through its re-refining process, the Company recycles used oil into lubricant base oil and by-products, and it is a supplier to firms that produce and market finished lubricants.

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