Financial Comparison: Republic Services (NYSE:RSG) & Pentair (NYSE:PNR)

Pentair (NYSE:PNR) and Republic Services (NYSE:RSG) are both large-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Volatility and Risk

Pentair has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Republic Services has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Institutional and Insider Ownership

92.4% of Pentair shares are held by institutional investors. Comparatively, 57.7% of Republic Services shares are held by institutional investors. 1.1% of Pentair shares are held by insiders. Comparatively, 0.1% of Republic Services shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Pentair and Republic Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pentair	$4.08 billion	4.28	$625.40 million	$3.66	29.15
Republic Services	$16.03 billion	4.53	$2.04 billion	$6.76	34.41

Republic Services has higher revenue and earnings than Pentair. Pentair is trading at a lower price-to-earnings ratio than Republic Services, indicating that it is currently the more affordable of the two stocks.

Dividends

Pentair pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. Republic Services pays an annual dividend of $2.32 per share and has a dividend yield of 1.0%. Pentair pays out 27.3% of its earnings in the form of a dividend. Republic Services pays out 34.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Pentair has increased its dividend for 7 consecutive years and Republic Services has increased 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.

Profitability

This table compares Pentair and Republic Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pentair	14.86%	21.62%	11.88%
Republic Services	12.97%	18.27%	6.48%

Analyst Ratings

This is a summary of current ratings for Pentair and Republic Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pentair	1	3	10	2	2.81
Republic Services	0	8	12	2	2.73

Pentair currently has a consensus price target of $114.3571, indicating a potential upside of 7.18%. Republic Services has a consensus price target of $262.1667, indicating a potential upside of 12.69%. Given Republic Services’ higher probable upside, analysts clearly believe Republic Services is more favorable than Pentair.

Summary

Republic Services beats Pentair on 9 of the 17 factors compared between the two stocks.

About Pentair

Pentair plc provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool. The Flow segment designs, manufactures, and sells fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles for fluid delivery, ion exchange, desalination, food and beverage, separation technologies in the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation, and crop spray in residential, commercial, and industrial markets. The Water Solutions segment provides commercial and residential water treatment products and systems, including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems, as well as installation and preventative services for use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as commercial total water management and filtration in foodservice operations. The Pool segment provides residential and commercial pool equipment and accessories comprising pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for applications in residential and commercial pool maintenance, pool repair, renovation, service, and construction and aquaculture solutions. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.

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.