Barron's: Covanta investors can clean up

|About: Covanta Holding Corporation (CVA)|By:, SA News Editor

Waste-to-energy services provider Covanta (CVA +1.2%) is poised to power higher, offering a potential 25% upside with a generous yield after hiking its dividend twice this year, according to a Barron's profile.

CVA is a "free cash flow-generating machine," converting ~50% of its EBITDA to free cash; it currently generates ~$260M/year of free cash flow for an attractive 10% yield.

A new cost savings initiative, with a targeted benefit of $30M to 2015 EBITDA, combined with the opening of a new facility in Canada and the start of a large waste disposal contract with NYC could lift cash flows significantly in the next year, David Englander writes.