Contrasting Republic Services (NYSE:RSG) & Sims Metal Management (OTCMKTS:SMSMY)

Republic Services (NYSE:RSG) and Sims Metal Management (OTCMKTS:SMSMY) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Profitability

This table compares Republic Services and Sims Metal Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Republic Services	13.00%	18.57%	6.53%
Sims Metal Management	N/A	N/A	N/A

Dividends

Republic Services pays an annual dividend of $2.50 per share and has a dividend yield of 1.2%. Sims Metal Management pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Republic Services pays out 35.9% of its earnings in the form of a dividend. Republic Services has raised its dividend for 22 consecutive years. Republic Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

57.7% of Republic Services shares are owned by institutional investors. 0.1% of Republic Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Republic Services has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Sims Metal Management has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Republic Services and Sims Metal Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Republic Services	0	12	11	0	2.48
Sims Metal Management	1	1	1	0	2.00

Republic Services currently has a consensus target price of $245.15, suggesting a potential upside of 17.32%. Given Republic Services’ stronger consensus rating and higher possible upside, research analysts plainly believe Republic Services is more favorable than Sims Metal Management.

Earnings & Valuation

This table compares Republic Services and Sims Metal Management”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Republic Services	$16.70 billion	3.85	$2.14 billion	$6.97	29.98
Sims Metal Management	$4.85 billion	0.62	-$12.30 million	N/A	N/A

Republic Services has higher revenue and earnings than Sims Metal Management.

Summary

Republic Services beats Sims Metal Management on 13 of the 15 factors compared between the two stocks.

About Republic Services

Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States and Canada. It is involved in the collection and processing of recyclable, solid waste, and industrial waste materials; transportation and disposal of non-hazardous and hazardous waste streams; and other environmental solutions. Its residential collection services include curbside collection of material for transport to transfer stations, landfills, recycling centers, and organics processing facilities; supply of recycling and waste containers; and renting of compactors. The company also engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill services. It serves small-container, large-container, and residential customers. The company was incorporated in 1996 and is based in Phoenix, Arizona.

About Sims Metal Management

Sims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services. It is involved in the collection, processing, and trading of iron and steel secondary raw materials; and other metal alloys and residues, principally aluminum, lead, copper, zinc, and nickel bearing materials. The company also engages in the provision of environmentally responsible solutions for the disposal of post-consumer electronic products, such as information technology assets recycled for commercial customers; and environmentally responsible recycling of negative value materials, including electronic equipment. In addition, it provides secondary processing and other services comprising recycling of municipal curbside materials, stevedoring, and other sources of service. The company was founded in 1917 and is headquartered in Mascot, Australia.