Take Out the Trash! (RSG)

Just business today.

No furtin’ around.

Republic Services, Inc. (NYSE:RSG) picks up your garbage.

They call it ‘recycling’ and ‘solid waste management’ and ‘environmental solutions’, but c’mon fellas, we’re all grown-ups here.

Let’s look at some numbers now.

Fundamentally, this fleet of garbage trucks looks way overpriced to us.

To wit—

• She trades with a multiple of 30.71x earnings,
• Her Dividend Yield is 1.28%, and…
• She’s valued at 4.84x her break-up value (Price to Book).
• She also carries too much debt (D/E is 1.18), and…
• She’s growing earnings at a very steady (but ridiculously slow) rate of 4.47% per year for the last FIVE years. So how she merits a P/E of over 30 is a mystery.

SANITATION BLUES

The only thing driving RSG’s momentum these days is talk of AI being incorporated into the business model to replace workers, reduce costs, and make the job of sorting trash more efficient.

With robots and optical scanners assisting the process, they claim, the opportunities for savings will be manifold and myriad.

Only problem is they don’t exist just yet.

No matter, though.

When companies talk about AI these days, it’s generally enough for Wall Street to start selling the snake oil.

Here’s the daily chart—

We await the arrival of His great and glorious day.

With kind regards,

Hugh L. O’Haynew

Follow @HughLOHaynew