Head-To-Head Review: Clean Harbors (CLH) vs. Covanta Holding Corporation (CVA)

Clean Harbors (NYSE: CLH) and Covanta Holding Corporation (NYSE:CVA) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitabiliy.

Volatility & Risk

Clean Harbors has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Covanta Holding Corporation has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

95.8% of Clean Harbors shares are owned by institutional investors. Comparatively, 90.0% of Covanta Holding Corporation shares are owned by institutional investors. 9.5% of Clean Harbors shares are owned by insiders. Comparatively, 11.6% of Covanta Holding Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Clean Harbors and Covanta Holding Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Clean Harbors $2.81 billion 1.16 $404.91 million ($0.70) -81.74
Covanta Holding Corporation $1.70 billion 1.09 $304.00 million ($0.14) -102.85

Clean Harbors has higher revenue and earnings than Covanta Holding Corporation. Covanta Holding Corporation is trading at a lower price-to-earnings ratio than Clean Harbors, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Clean Harbors and Covanta Holding Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clean Harbors 1 3 7 0 2.55
Covanta Holding Corporation 1 2 5 0 2.50

Clean Harbors presently has a consensus price target of $59.40, suggesting a potential upside of 3.81%. Covanta Holding Corporation has a consensus price target of $17.38, suggesting a potential upside of 20.66%. Given Covanta Holding Corporation’s higher probable upside, analysts plainly believe Covanta Holding Corporation is more favorable than Clean Harbors.

Profitability

This table compares Clean Harbors and Covanta Holding Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clean Harbors -1.44% 0.31% 0.09%
Covanta Holding Corporation -0.94% -8.88% -0.94%

Dividends

Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. Clean Harbors does not pay a dividend. Covanta Holding Corporation pays out -714.2% of its earnings in the form of a dividend.

Summary

Clean Harbors beats Covanta Holding Corporation on 9 of the 15 factors compared between the two stocks.

About Clean Harbors

Clean Harbors, Inc. is a provider of environmental, energy and industrial services throughout North America. The Company is also a re-refiner and recycler of used oil in the world and a provider of parts cleaning and related environmental services to commercial, industrial and automotive customers in North America. The Company operates in six segments: Technical Services, Industrial Services, Field Services, Safety-Kleen, Oil and Gas Field Services, and Lodging Services. The Company is also a service provider in the recovery and decontamination of pollutants. The Company provides services to protect the ozone layer from the effects of chlorofluorocarbons (CFCs). The Company offers brands, such as Performance Plus brand and green brand EcoPower. The Company also offers CleanPack services, which include the collection, identification and categorization, packaging, transportation and disposal of laboratory chemicals and household hazardous waste.

About Covanta Holding Corporation

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.

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