Republic Services, Inc. (NYSE:RSG)

CAPS Rating: 4 out of 5

Provider of non-hazardous solid waste collection and disposal services in the United States.

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Player Avatar goqqq (38.24) Submitted: 5/3/2011 10:36:17 PM : Outperform Start Price: $30.80 RSG Score: -10.88

Waste haulers have extremely high operating leverage by nature of their fixed-cost structure (in large part because of trucks and landfill operations). If Republic can generate enough waste volume to cover its fixed costs, incremental revenue translates into high margins and profitability. The firm has an exclusive contract with the city of Las Vegas, lasting until 2035. Republic has created a monopoly in the growing Las Vegas region, virtually ensuring years of strong cash flow.

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