Analyzing GFL Environmental (NYSE:GFL) & Aris Water Solutions (NYSE:ARIS)

Aris Water Solutions (NYSE:ARIS) and GFL Environmental (NYSE:GFL) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Valuation and Earnings

This table compares Aris Water Solutions and GFL Environmental”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aris Water Solutions	$435.44 million	3.25	$26.86 million	$0.83	28.79
GFL Environmental	$5.62 billion	3.30	-$527.43 million	$6.35	8.03

Aris Water Solutions has higher earnings, but lower revenue than GFL Environmental. GFL Environmental is trading at a lower price-to-earnings ratio than Aris Water Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Aris Water Solutions and GFL Environmental’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aris Water Solutions	6.00%	3.77%	1.99%
GFL Environmental	48.53%	3.71%	1.42%

Dividends

Aris Water Solutions pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. GFL Environmental pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Aris Water Solutions pays out 67.5% of its earnings in the form of a dividend. GFL Environmental pays out 0.9% 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. Aris Water Solutions has increased its dividend for 2 consecutive years and GFL Environmental has increased its dividend for 5 consecutive years.

Institutional & Insider Ownership

39.7% of Aris Water Solutions shares are held by institutional investors. Comparatively, 64.7% of GFL Environmental shares are held by institutional investors. 22.5% of Aris Water Solutions shares are held by insiders. Comparatively, 8.7% of GFL Environmental shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Aris Water Solutions and GFL Environmental, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aris Water Solutions	0	6	2	0	2.25
GFL Environmental	0	1	8	2	3.09

Aris Water Solutions currently has a consensus target price of $26.50, suggesting a potential upside of 10.90%. GFL Environmental has a consensus target price of $57.8571, suggesting a potential upside of 13.48%. Given GFL Environmental’s stronger consensus rating and higher probable upside, analysts plainly believe GFL Environmental is more favorable than Aris Water Solutions.

Volatility & Risk

Aris Water Solutions has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, GFL Environmental has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Summary

GFL Environmental beats Aris Water Solutions on 11 of the 18 factors compared between the two stocks.

About Aris Water Solutions

Aris Water Solutions, Inc., an environmental infrastructure and solutions company, provides water handling and recycling solutions. The company's produced water handling business gathers, transports, unless recycled, and handles produced water generated from oil and natural gas production. Its water solutions business develops and operates recycling facilities to treat, store, and recycle produced water. Aris Water Solutions, Inc. was founded in 2015 and is headquartered in Houston, Texas.

About GFL Environmental

GFL Environmental Inc. offers non-hazardous solid waste management and environmental services in Canada and the United States. It offers solid waste management, liquid waste management, and soil remediation services, including collection, transportation, transfer, recycling, and disposal services for municipal, residential, and commercial, and industrial customers. The company was incorporated in 2007 and is headquartered in Vaughan, Canada.