Republic Services Started as a “Hold” at KeyBanc; Still Waiting for Waste Recovery (RSG)

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Waste management specialist Republic Services, Inc. ( RSG ) on Wednesday received some tepid commentary from analysts at KeyBanc.

The firm initiated coverage on RSG with a "Hold" rating, noting that although some catalysts could be on the horizon, they're still waiting for a recovery in the waste management sector. A KeyBanc analyst commented, "Historically, RSG has added roughly 3.0% to revenue per year (2000-2008) from acquisitions. While we do not anticipate any significant deals, we believe RSG will be active in the market and could layer in $100 million or more (roughly 1% of sales) in acquisition-related revenue in 2012 and 2013."

Continuing, "Based on our 2012 EBITDA estimate, the shares are currently trading at 7.1x, which represents a 6.6% discount to historical valuation of 7.6x and a 4.1% discount to current Waste Management valuation."

Republic Services shares were mostly flat in premarket trading Wednesday.

The Bottom Line
Shares of Republic Services ( RSG ) have a 3.31% dividend yield, based on last night's closing stock price of $27.70. The stock has technical support in the $25-$26 price area. If the shares can firm up, we see overhead resistance around the $29-$30 price levels.

Republic Services, Inc. ( RSG ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks


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