Covanta Holding Corporation (NYSE: CVA) and Advanced Disposal Services (NASDAQ:ADSW) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Institutional and Insider Ownership

96.2% of Covanta Holding Corporation shares are held by institutional investors. 11.6% of Covanta Holding Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Covanta Holding Corporation and Advanced Disposal Services’ 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 1.11 $296.00 million ($0.19) -76.57
Advanced Disposal Services $1.44 billion 1.50 $394.80 million N/A N/A

Advanced Disposal Services has higher revenue, but lower earnings than Covanta Holding Corporation.

Profitability

This table compares Covanta Holding Corporation and Advanced Disposal Services’ 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%
Advanced Disposal Services -0.05% -0.10% -0.02%

Dividends

Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. Advanced Disposal Services does not pay a dividend. Covanta Holding Corporation pays out -526.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Covanta Holding Corporation and Advanced Disposal Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covanta Holding Corporation 1 0 6 0 2.71
Advanced Disposal Services 0 2 8 0 2.80

Covanta Holding Corporation currently has a consensus target price of $17.07, suggesting a potential upside of 17.33%. Advanced Disposal Services has a consensus target price of $25.22, suggesting a potential upside of 3.45%. Given Covanta Holding Corporation’s higher probable upside, equities analysts plainly believe Covanta Holding Corporation is more favorable than Advanced Disposal Services.

Summary

Advanced Disposal Services beats Covanta Holding Corporation on 7 of the 13 factors compared between the two stocks.

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.

Advanced Disposal Services Company Profile

Advanced Disposal Services, Inc. is an integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operating primarily in secondary markets or under exclusive arrangements. The Company’s segments include South, East, Midwest and Corporate. As of December 31, 2016, the Company had its presence in 16 states across the Midwest, South and East regions of the United States, as well as in the Commonwealth of the Bahamas, served approximately 2.7 million residential customers and over 200,000 commercial and industrial (C&I) customers through its network of 90 collection operations, 72 transfer stations, 21 owned or operated recycling facilities and 39 owned or operated active landfills. The Company’s vertically integrated environmental services operations can be classified into three lines of business: collection services, disposal services and recycling services. The disposal services include transfer stations and landfills.

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