Ugly Duckling
Deep value, arbitrage, mid-cap, mutual fund analyst

Covanta: Burning Trash, Generating Power And A 10% FCF Yield


Covanta (NYSE:CVA) stands out in the field of energy producers. Instead of relying on fossil fuels or even the typical renewables, Covanta produces energy through the incineration of municipal waste. Covanta's two primary revenue streams are waste disposal and energy production from that disposed waste. This means that the company is paid to burn the fuel from which it produces energy! Covanta operates 44 facilities in the United States which produce 5% of the country's waste energy from 20 million tons of solid waste. Along with Covanta's 14 other energy generating facilities (biomass and hydroelectric), the company generates 10 million megawatt hours of electricity annually.

Covanta's generators produce energy by burning solid waste. The heat generation in...

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