NYSE:CVA

Stock Analysis Report

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Market Cap

US$2.7b

Last Updated

2021/08/03 23:40 UTC

Data Sources

Company Financials +

Executive Summary

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


Snowflake Analysis

Second-rate dividend payer with moderate growth potential.


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: CVA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CVA's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

-0.3%

CVA

1.8%

US Commercial Services

0.9%

US Market


1 Year Return

104.3%

CVA

32.0%

US Commercial Services

34.7%

US Market

Return vs Industry: CVA exceeded the US Commercial Services industry which returned 31.2% over the past year.

Return vs Market: CVA exceeded the US Market which returned 34.4% over the past year.


Shareholder returns

CVAIndustryMarket
7 Day-0.3%1.8%0.9%
30 Day12.3%4.0%0.2%
90 Day31.3%5.5%4.7%
1 Year109.9%104.3%33.5%32.0%36.8%34.7%
3 Year34.1%14.6%53.9%44.1%62.5%52.4%
5 Year78.6%33.7%130.4%108.3%123.1%98.4%

Long-Term 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

Valuation

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

38.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CVA ($19.94) is trading below our estimate of fair value ($32.49)

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


Price To Earnings Ratio

PE vs Industry: CVA is unprofitable, so we can't compare its PE Ratio to the US Commercial Services industry average.

PE vs Market: CVA is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: CVA is unprofitable, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CVA is overvalued based on its PB Ratio (10.4x) compared to the US Commercial Services industry average (2.6x).


Future Growth

How is Covanta Holding forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

58.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CVA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).

Earnings vs Market: CVA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CVA's is expected to become profitable in the next 3 years.

Revenue vs Market: CVA's revenue (2.7% per year) is forecast to grow slower than the US market (9.2% per year).

High Growth Revenue: CVA's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CVA's Return on Equity is forecast to be low in 3 years time (11.7%).


Past Performance

How has Covanta Holding performed over the past 5 years?

-22.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CVA is currently unprofitable.

Growing Profit Margin: CVA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CVA is unprofitable, and losses have increased over the past 5 years at a rate of 22.1% per year.

Accelerating Growth: Unable to compare CVA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CVA is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (11.3%).


Return on Equity

High ROE: CVA has a negative Return on Equity (0%), as it is currently unprofitable.


Financial Health

How is Covanta Holding's financial position?


Financial Position Analysis

Short Term Liabilities: CVA's short term assets ($389.0M) do not cover its short term liabilities ($422.0M).

Long Term Liabilities: CVA's short term assets ($389.0M) do not cover its long term liabilities ($3.0B).


Debt to Equity History and Analysis

Debt Level: CVA's debt to equity ratio (960.6%) is considered high.

Reducing Debt: CVA's debt to equity ratio has increased from 553.9% to 960.6% over the past 5 years.

Debt Coverage: CVA's debt is not well covered by operating cash flow (10.5%).

Interest Coverage: CVA's interest payments on its debt are not well covered by EBIT (0.8x coverage).


Balance Sheet


Dividend

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

1.60%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CVA's dividend (1.6%) is higher than the bottom 25% of dividend payers in the US market (1.32%).

High Dividend: CVA's dividend (1.6%) is low compared to the top 25% of dividend payers in the US market (3.57%).


Stability and Growth of Payments

Stable Dividend: CVA's dividends per share have been stable in the past 10 years.

Growing Dividend: CVA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (705.3%), CVA's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CVA's dividends in 3 years are not forecast to be well covered by earnings (101.6% payout ratio).


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Mike Ranger (63 yo)

0.83

Tenure

US$1,715,035

Compensation

Mr. Michael William Ranger, also known as Mike, serves as the President, Chief Executive Officer and Director at Covanta Holding Corporation since October 29, 2020. He co-founded Diamond Castle Holdings, L...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD1.72M) is below average for companies of similar size in the US market ($USD5.32M).

Compensation vs Earnings: Mike's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: CVA's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

Experienced Board: CVA's board of directors are seasoned and experienced ( 14.8 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: CVA
  • Exchange: NYSE
  • Founded: 1986
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: US$2.652b
  • Shares outstanding: 132.99m
  • Website: https://www.covanta.com

Number of Employees


Location

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

Listings


Biography

Covanta Holding Corporation, through its subsidiaries, provides waste and energy services to municipal entities primarily in the United States and internationally. It owns and operates infrastructure for t...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/03 23:40
End of Day Share Price2021/08/03 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.