Waste Stock Surges to a Fresh Round of Record Highs

RSG is already up more than 30% since the start of the year

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Republic Services, Inc. (NYSE:RSG) is the second largest provider of non-hazardous solid waste collection, transfer, disposal, recycling, and energy services in the United States, as measured by revenue. Through RSG's subsidiaries, Republic’s collection operations, transfer stations, recycling processing centers, landfills, and environmental services provide solutions for recycling and waste disposal across 41 states. At last glance, RSG is trading up 0.7% at $125.67, and earlier hit a fresh record high of $126.05.

Regarding the stock, RSG has increased 45% since bottoming at a two-year low of $86.18 in October 2020. Additionally, shares of RSG have grown 33% year-to-date. Republic Services offers investors a forward dividend of $1.84 and a dividend yield of 1.47%.

Republic Services has beat earnings expectations on all four of its most recent earnings reports. For Q2 of 2020, RSG beat analysts’ estimates by a margin of $0.22, reporting an EPS of $0.81. For Q3 of 2020, Republic Services' EPS increased to $1.00, beating expectations by a margin of $0.19. For Q4 of 2020, RSG maintained earnings at $1.00 per share and also beat estimates by a margin of $0.19 once again. For Q1 of 2021, Republic Services reported an EPS of $0.93 and beat expectations by a margin of $0.08.

Looking at the stock's fundamentals, Republic Services really does not have much to offer other than an expected increase in earnings, which is reflected in its forward price-earnings ratio of 28.17. Republic Services stock currently trades at an inflated price-earnings ratio of 35.56.

Moreover, RSG has demonstrated very slow revenue growth and has been inconsistent on the bottom-line. RSG also has a subpar balance sheet with $9.28 billion in total debt and only $34 million in cash. In general, Republic Services stock appears to be one for the short sellers as the stock continues to trade nears its all-time high.

Analysts remain mostly split, with a quiet lean toward optimism. Heading into today, six of the 11 covering brokerages boast a "buy" or "strong buy" recommendation.

Now looks like a great opportunity time to weigh in on RSG's next move with options. The equity's Schaeffer’s Volatility Index (SVI) of 16% sits in the 14th percentile of all readings from the past 12 months. 

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