Republic Services, Inc. RSG has had an impressive year-to-date run. The stock has gained 17%, significantly outperforming the industry's 11% growth.

Key competitors' performances have been mixed during this time, with Waste Management WM rising 14% but Clean Harbors CLH declining 13%.

Reasons for RSG’s 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 environment of demand for this leading waste disposal companyis currently good across all its services. Revenues increased 5.6% year over year in the fourth quarter of 2024. Services — Collection, Transfer, Landfill and Environmental Solutions — registered 3.5%, 8%, 5.5% and 16.7% growth, respectively.

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.

RSG’s increase in revenue per employee (RPE) by 5% in 2024 demonstrates improved workforce efficiency and operational productivity.  This rise highlights the company's ability to optimize talent utilization and adapt to challenges, signaling effective management and resource allocation. Investors view the rising RPE as a positive indicator of value creation and financial health. It suggests that the company’s workforce is delivering higher output, boosting profitability potential and reinforcing its growth narrative, encouraging long-term investment in the stock.

Commitment to shareholder returns makes RSG a reliable way for investors to compound wealth over the long term. In 2022, 2023 and 2024, it paid $593 million, $638 million and $687 million in dividends and repurchased shares worth $204 million, $262 million and $490 million, respectively.

Republic Services currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Waste Management, Inc. (WM) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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