Vertex Energy (NASDAQ: VTNR) and Waste Connections (NYSE:WCN) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Vertex Energy and Waste Connections, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vertex Energy 0 1 0 0 2.00
Waste Connections 0 1 8 1 3.00

Vertex Energy presently has a consensus price target of $1.00, indicating a potential upside of 43.68%. Waste Connections has a consensus price target of $71.33, indicating a potential upside of 6.06%. Given Vertex Energy’s higher possible upside, research analysts clearly believe Vertex Energy is more favorable than Waste Connections.

Volatility and Risk

Vertex Energy has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Waste Connections has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Dividends

Waste Connections pays an annual dividend of $0.38 per share and has a dividend yield of 0.6%. Vertex Energy does not pay a dividend. Waste Connections pays out 32.1% of its earnings in the form of a dividend. Vertex Energy has increased its dividend for 7 consecutive years.

Insider & Institutional Ownership

16.8% of Vertex Energy shares are owned by institutional investors. Comparatively, 82.8% of Waste Connections shares are owned by institutional investors. 31.0% of Vertex Energy shares are owned by insiders. Comparatively, 0.7% of Waste Connections shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Vertex Energy and Waste Connections’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vertex Energy $131.20 million 0.17 $447,203.00 ($0.42) -1.66
Waste Connections $4.40 billion 4.03 $1.37 billion $1.18 56.84

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

Profitability

This table compares Vertex Energy and Waste Connections’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vertex Energy -6.49% -23.10% -10.13%
Waste Connections 7.11% 9.19% 4.59%

Summary

Waste Connections beats Vertex Energy on 12 of the 17 factors compared between the two stocks.

Vertex Energy Company Profile

Vertex Energy, Inc. is an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The Company focuses on recycling used motor oil and other petroleum by-products. The Company’s segments include the Black Oil, Refining and Marketing, and Recovery divisions. The Company’s product categories include Used Motor Oil, Fuel Oil, pyrolysis gasoline (Pygas), Gasoline Blendstock and Base Oil. The Black Oil division is engaged in operations across the used motor oil recycling value chain, including collection, aggregation, transportation, storage, refinement and sales of aggregated feedstock and re-refined products to end users. The Refining and Marketing division is engaged in the aggregation of feedstock, re-refining it into end products, and selling these products to customers. The Recovery division is a provider of generator solutions for the recovery and management of hydrocarbon streams.

Waste Connections Company Profile

Waste Connections, Inc. is a solid waste services company in North America. The Company provides waste collection, transfer, disposal and recycling services in markets in the United States and Canada. The Company operates through six segments: Southern segment, Western segment, Eastern segment, Canada segment, Central segment and E&P segment. Through its R360 Environmental Solutions subsidiary, it also provides non-hazardous exploration and production, or E&P, waste treatment, recovery and disposal services in various natural resource producing areas in the United States. It also provides intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. As of December 31, 2016, it served residential, commercial, industrial and exploration and production (E&P) customers in 40 states and the District of Columbia in the United States and five provinces in Canada.

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