Covanta Holding Corporation (CVA) & Its Peers Head-To-Head Analysis

Covanta Holding Corporation (NYSE: CVA) is one of 20 publicly-traded companies in the “Waste Management, Disposal & Recycling Services” industry, but how does it compare to its competitors? We will compare Covanta Holding Corporation to related businesses based on the strength of its institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Insider and Institutional Ownership

97.4% of Covanta Holding Corporation shares are owned by institutional investors. Comparatively, 52.5% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by institutional investors. 11.6% of Covanta Holding Corporation shares are owned by company insiders. Comparatively, 12.3% of shares of all “Waste Management, Disposal & Recycling Services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Covanta Holding Corporation and its competitors gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Covanta Holding Corporation $1.70 billion -$4.00 million -29.02
Covanta Holding Corporation Competitors $850.74 million $28.04 million -358.15

Covanta Holding Corporation has higher revenue, but lower earnings than its competitors. Covanta Holding Corporation is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Covanta Holding Corporation has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Covanta Holding Corporation’s competitors have a beta of 0.64, meaning that their average share price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Covanta Holding Corporation and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covanta Holding Corporation 1 0 6 0 2.71
Covanta Holding Corporation Competitors 44 277 585 14 2.62

Covanta Holding Corporation presently has a consensus price target of $17.79, indicating a potential upside of 20.17%. As a group, “Waste Management, Disposal & Recycling Services” companies have a potential upside of 10.58%. Given Covanta Holding Corporation’s stronger consensus rating and higher probable upside, research analysts clearly believe Covanta Holding Corporation is more favorable than its competitors.

Dividends

Covanta Holding Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. Covanta Holding Corporation pays out -196.1% of its earnings in the form of a dividend. As a group, “Waste Management, Disposal & Recycling Services” companies pay a dividend yield of 1.9% and pay out 115.0% of their earnings in the form of a dividend. Covanta Holding Corporation is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Profitability

This table compares Covanta Holding Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covanta Holding Corporation -3.68% -12.66% -1.11%
Covanta Holding Corporation Competitors -327.38% -69.76% -11.94%

Summary

Covanta Holding Corporation beats its competitors on 11 of the 14 factors compared.

About Covanta Holding Corporation

Covanta Holding Corporation is a holding company. The Company, through its subsidiaries, owns and operates infrastructure for the conversion of waste to energy, as well as other waste disposal and renewable energy production businesses. The Company operates through North America segment, which consists of waste and energy services operations located primarily in the United States and Canada. Outside of North America, the Company is constructing an energy-from-waste (EfW) facility in Dublin, Ireland. The Company holds interests in an EfW facility in Italy and an infrastructure business in China, which is engaged in EfW operations. These EfW projects generate revenue from three main sources: fees charged for operating projects or processing waste received; the sale of electricity and/or steam, and the sale of ferrous and non-ferrous metals that are recovered from the waste stream as part of the EfW process.

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