Investment Showdown: Veralto vs. Waste Connections Revealed

Veralto Corporation and Waste Connections, both prominent players in the business services sector, are under scrutiny as investors weigh their potential. A comprehensive financial survey compares these two large-cap companies based on various key metrics, including earnings strength, risk profiles, and analyst recommendations.

Ownership and Institutional Support

Institutional ownership plays a crucial role in assessing a company’s investment potential. Currently, 91.3% of Veralto shares are held by institutional investors, while 86.1% of Waste Connections shares are similarly owned. Insider ownership reveals a modest 0.4% for Veralto and 0.3% for Waste Connections. High institutional ownership often indicates confidence from large investors, suggesting that both companies are perceived as capable of outperforming the market in the long term.

Volatility and Risk Assessment

Volatility is a significant factor for investors. Veralto has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500 index. In comparison, Waste Connections boasts an even lower beta of 0.6, reflecting a 40% reduction in volatility relative to the broader market. This lower risk profile may appeal to conservative investors seeking stability.

Analysts provide insights into the potential upside of each stock. Veralto has a consensus price target of $115.25, suggesting a potential upside of 16.61%. Waste Connections, however, commands a more optimistic consensus target of $208.67, translating to a potential upside of 23.65%. These figures suggest that analysts favor Waste Connections over Veralto in the current market landscape.

Profitability metrics also reveal distinct differences. While Veralto demonstrates higher earnings, it has lower revenue compared to Waste Connections. Furthermore, Veralto’s price-to-earnings ratio is lower, indicating it may currently be the more affordable stock option.

Company Profiles

Founded in 2022 and headquartered in Waltham, Massachusetts, Veralto Corporation specializes in water analytics, treatment, and product quality services. The company operates through two segments: Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment focuses on providing precision instrumentation and technologies for analyzing and treating water across various sectors, including residential and industrial applications. The PQI segment supplies inline printing solutions and color management services to regulated industries, leveraging brands such as Hach and Videojet.

Conversely, Waste Connections, established in 1997 and based in Woodbridge, Canada, offers a full suite of waste management services, including collection, disposal, and recycling. The company serves various customer segments, including residential, commercial, and industrial clients. Waste Connections also manages transfer stations and provides specialized services for the oil and gas industry, addressing waste treatment and recovery needs.

Conclusion

In summary, Veralto outperformed Waste Connections in 10 out of 18 comparative factors. This analysis highlights the strengths of both companies, revealing that while Veralto offers higher earnings, Waste Connections presents a more favorable investment opportunity based on analyst ratings and potential upside. Investors will need to weigh these factors carefully as they decide where to allocate their resources in the competitive business services market.