Measuring Republic Services, Inc.’s (NYSE:RSG) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess RSG’s recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements.
Was RSG’s weak performance lately a part of a long-term decline?
RSG’s trailing twelve-month earnings (from 31 December 2018) of US$1.0b has declined by -19% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 17%, indicating the rate at which RSG is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Republic Services has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. Furthermore, its return on assets (ROA) of 6.6% is below the US Commercial Services industry of 7.1%, indicating Republic Services’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Republic Services’s debt level, has increased over the past 3 years from 8.1% to 8.9%.
What does this mean?
Though Republic Services’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Republic Services to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for RSG’s future growth? Take a look at our free research report of analyst consensus for RSG’s outlook.
- Financial Health: Are RSG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.