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Republic Services: Acquisitions Achieving Scalable Growth, But Overvalued

Mar. 22, 2023 6:39 PM ETRepublic Services, Inc. (RSG)1 Comment
Francesco Infusino profile picture
Francesco Infusino


  • Republic Services beat earnings expectations and achieved great growth YOY even in harsh environments.
  • The company consistently outperformed the S&P and pays out a solid dividend.
  • The company's CapEX strategy enables them to generate stronger free cash flows and differentiate from competitors.
  • After completing a DCF valuation, I can conclude that the company is overvalued, and so I'm giving it a hold rating.

Garbage truck, dustcart with bin lift, household waste removal in residential area in winter, refuse container, snow

Nadya So/iStock via Getty Images

Republic Services (NYSE:RSG) has exemplified strong and consistent growth throughout the past few decades. With strong organic growth along with improvements to operational efficiencies and acquisitions, I rate the stock as a hold due to

Market overview of Republic Services

Republic Services Overview (Investor Presentation)

Republic Services performance

Historic Share Performance (Seeking Alpha)

Comparison of Republic Services to S&P

Republic Services Compared to S&P (Created by author using Bar Charts)

RSG digital integration

Republic Services Digital Strategy (Investor Presentation)

RSG CapEX strategy

Republic Services Capital Allocation Strategy (Investor Presentation)

RSG analyst consensus

Analyst Consensus (Trading View)

Cost of Equity calculation

Cost of Equity Calculation (Created by author using Alpha Spread)

WACC calculation

WACC Calculation (Created by author using Alpha Spread)

RSG DCF assumptions

DCF 5Y Assumptions (Created by author using Alpha Spread)

RSG capital structure

Capital Structure (Created by author using Alpha Spread)

This article was written by

Francesco Infusino profile picture
I am a driven business student who is interested in finding value stocks with a fit future for the long term.      I am associated with a fellow contributor, Jishan Sidhu as we are part of the same investment club.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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