Republic Services, Inc. RSG has had an impressive run over the past year. The stock has gained 26%, significantly outperforming the 16% growth of the industry.

Reasons for the Upside

The services that Republic Services provides usually cannot be delayed and are required on a scheduled basis, allowing the company to achieve a steady flow of revenues.

The company delivered better-than-expected earnings performance in the past four quarters. It continues to benefit from increasing environmental concerns, rapid industrialization and an increase in population.

The demand environment for this leading waste disposal companyis currently good across all its services. Revenues increased 6.5% year over year in the third quarter of 2024. Services — Collection, Transfer, Landfill, and Environmental Solutions — registered 4.8%, 2.6%, 3.8% and 14.8% growth, respectively.

RSG is focused on increasing its operational efficiency and reducing fleet operating costs by shifting to compressed natural gas (“CNG”) collection vehicles. In 2023, around 20% of the company’s recycling and solid waste collection fleet operated on CNG, and 13% of its replacement recycling and solid waste vehicle purchases were CNG vehicles.

Commitment to shareholder returns makes RSG a reliable way for investors to compound wealth over the long term. In 2023, 2022, and 2021, it paid $638.1 million, $592.9 million and $552.6 million in dividends and repurchased shares worth $261.8 million, $203.5 million and $252.2 million, respectively.

Zacks Rank and Stocks to Consider

Republic Services currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader Zacks Business Services sector are Climb Global Solutions, Inc. CLMB and Qifu Technology, Inc. QFIN.

Climb Global Solutions flaunts a Zacks Rank of 1 (Strong Buy) at present. It has a long-term earnings growth expectation of 16%. CLMB delivered a trailing four-quarter earnings surprise of 51.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Qifu Technology sports a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 20.9%. QFIN delivered a trailing four-quarter earnings surprise of 12.4%, on average.

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