DB:C3K

Stock Analysis Report

Executive Summary

Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in the United States and Canada.

Rewards

Trading at 24% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -54.5% per year for the next 3 years

Interest payments are not well covered by earnings

Dividend of 6.41% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Slightly overvalued unattractive dividend payer.


Similar Companies

Share Price & News

How has Covanta Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: C3K has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

C3K

-1.1%

DE Commercial Services

0.1%

DE Market


1 Year Return

1.8%

C3K

-4.3%

DE Commercial Services

14.1%

DE Market

Return vs Industry: C3K exceeded the German Commercial Services industry which returned -4.3% over the past year.

Return vs Market: C3K underperformed the German Market which returned 14.1% over the past year.


Shareholder returns

C3KIndustryMarket
7 Day2.1%-1.1%0.1%
30 Day8.0%-1.1%0.2%
90 Day13.0%4.8%3.3%
1 Year8.0%1.8%-0.8%-4.3%17.6%14.1%
3 Year18.3%-2.3%10.4%0.9%14.8%4.8%
5 Year6.4%-21.7%2.7%-11.7%22.2%5.4%

Price Volatility Vs. Market

How volatile is Covanta Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Covanta Holding undervalued compared to its fair value and its price relative to the market?

31.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: C3K (€14.5) is trading below our estimate of fair value (€19.07)

Significantly Below Fair Value: C3K is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: C3K is poor value based on its PE Ratio (291.6x) compared to the Commercial Services industry average (31.6x).

PE vs Market: C3K is poor value based on its PE Ratio (291.6x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: C3K's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: C3K is overvalued based on its PB Ratio (5.4x) compared to the DE Commercial Services industry average (3.3x).


Next Steps

Future Growth

How is Covanta Holding forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-54.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: C3K's earnings are forecast to decline over the next 3 years (-54.5% per year).

Earnings vs Market: C3K's earnings are forecast to decline over the next 3 years (-54.5% per year).

High Growth Earnings: C3K's earnings are forecast to decline over the next 3 years.

Revenue vs Market: C3K's revenue (3% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: C3K's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if C3K's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Covanta Holding performed over the past 5 years?

28.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: C3K has a large one-off gain of $56.0M impacting its September 30 2019 financial results.

Growing Profit Margin: C3K's current net profit margins (0.4%) are lower than last year (14.7%).


Past Earnings Growth Analysis

Earnings Trend: C3K's earnings have grown significantly by 28.9% per year over the past 5 years.

Accelerating Growth: C3K's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: C3K had negative earnings growth (-97.4%) over the past year, making it difficult to compare to the Commercial Services industry average (10.8%).


Return on Equity

High ROE: C3K's Return on Equity (1.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Covanta Holding's financial position?


Financial Position Analysis

Short Term Liabilities: C3K's short term assets ($475.0M) exceed its short term liabilities ($339.0M).

Long Term Liabilities: C3K's short term assets ($475.0M) do not cover its long term liabilities ($3.1B).


Debt to Equity History and Analysis

Debt Level: C3K's debt to equity ratio (667.9%) is considered high.

Reducing Debt: C3K's debt to equity ratio has increased from 274.5% to 667.9% over the past 5 years.

Debt Coverage: C3K's debt is not well covered by operating cash flow (8.1%).

Interest Coverage: C3K's interest payments on its debt are not well covered by EBIT (0.6x coverage).


Balance Sheet

Inventory Level: C3K has a high level of physical assets or inventory.

Debt Coverage by Assets: C3K's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Covanta Holding's current dividend yield, its reliability and sustainability?

6.40%

Current Dividend Yield


Dividend Yield vs Market

company6.4%marketbottom25%1.3%markettop25%3.6%industryaverage3.4%forecastin3Years6.4%

Current dividend yield vs market & industry

Notable Dividend: C3K's dividend (6.41%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: C3K's dividend (6.41%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, C3K has been paying a dividend for less than 10 years.

Growing Dividend: C3K's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (1867.9%), C3K's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: C3K is forecast to pay a dividend in 3 years whilst incurring a loss, therefore the dividend is not forecast to be well covered.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure


CEO

Steve Jones (58yo)

4.9yrs

Tenure

US$4,639,255

Compensation

Mr. Stephen J. Jones, also known as Steve, has been the Chief Executive Officer and President of Covanta Holding Corporation since January 2015. Mr. Jones has been an Independent Director of Tronox Holding ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD4.64M) is above average for companies of similar size in the German market ($USD1.47M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Jones
President4.9yrsUS$4.64m0.32% $6.0m
Bradford Helgeson
Executive VP & CFO6.3yrsUS$2.14m0.081% $1.5m
Timothy Simpson
Executive VP15.3yrsUS$1.54m0.085% $1.6m
Derek Veenhof
Executive Vice President of Asset Management5.1yrsUS$1.94m0.11% $2.1m
Michael de Castro
Executive Vice President of Supply Chain4.6yrsUS$1.55m0.069% $1.3m
Manpreet Grewal
VP & Chief Accounting Officer2.9yrsno data0.016% $305.6k
Daniel Mannes
Vice President of Investor Relations0yrsno datano data
Matthew Mulcahy
Executive VP & Head of Corporate Development7.9yrsUS$1.21m0.076% $1.4m
Virginia Angilello
Senior VP & Chief Human Resources Officer1.8yrsno data0.029% $549.8k
Paul Gilman
Senior VP & Chief Sustainability Officer12.1yrsno datano data

5.1yrs

Average Tenure

53.5yo

Average Age

Experienced Management: C3K's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Stephen Jones
President4.9yrsUS$4.64m0.32% $6.0m
David Barse
Independent Director23.8yrsUS$180.02k0.076% $1.4m
Peter C. Bynoe
Independent Director15.6yrsUS$170.03k0.057% $1.1m
Robert Silberman
Lead Director0yrsUS$180.00k0.077% $1.4m
Jean Smith
Independent Director16.2yrsUS$180.02k0.078% $1.5m
Samuel Zell
Chairman of the Board14.4yrsUS$600.04k0.12% $2.4m
Michael Ranger
Independent Director3.4yrsUS$185.02k0.031% $578.3k
Joseph Holsten
Independent Director10.8yrsUS$180.02k0.078% $1.5m
Linda Fisher
Independent Director12.2yrsUS$170.00k0.027% $502.3k
Ronald Broglio
Independent Director15.3yrsUS$170.00k0.0050% $93.7k

14.4yrs

Average Tenure

64.5yo

Average Age

Experienced Board: C3K's board of directors are seasoned and experienced ( 14.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Covanta Holding Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Covanta Holding Corporation
  • Ticker: C3K
  • Exchange: DB
  • Founded: 1960
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: US$2.040b
  • Listing Market Cap: US$1.890b
  • Shares outstanding: 130.71m
  • Website: https://www.covanta.com

Number of Employees


Location

  • Covanta Holding Corporation
  • 445 South Street
  • Morristown
  • New Jersey
  • 7960
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CVANYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1990
C3KDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1990

Biography

Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in the United States and Canada. It owns and operates infrastructure for the conversion of waste to energy, as well as engages in related waste transport and disposal, and other renewable energy production businesses. The company disposes waste and generates electricity and/or steam; sells metal recovered during the energy-from-waste (EfW) process; and offers waste management solutions, such as site clean-up, wastewater treatment, pharmaceutical and healthcare solutions, transportation and logistics, recycling, and depackaging. It owns and operates 44 EfW facilities; 16 waste transfer stations, 20 material processing facilities, 4 landfills, and 1 regional metals recycling facility. Covanta Holding Corporation has a strategic partnership with the Green Investment Group Limited to develop, fund, and own EfW projects in Ireland and the United Kingdom. The company was formerly known as Danielson Holding Corporation and changed its name to Covanta Holding Corporation in September 2005. Covanta Holding Corporation was founded in 1960 and is headquartered in Morristown, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 22:22
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.