CNG Vehicles Aid Republic Services (RSG) Amid Low Liquidity

Core Viewpoint - Republic Services (RSG) has demonstrated strong performance in 2023, with its shares increasing by 13.8%, surpassing both the industry average of 10.6% and the Zacks S&P 500 Composite's rise of 12.4% [1] Financial Performance - In 2023, Republic Services distributed $650 million in dividends and repurchased shares worth$261.8 million, reflecting its commitment to shareholder value [2] - For the first quarter of 2024, RSG reported earnings per share of $1.5, exceeding the Zacks Consensus Estimate by 5.8$3.9 billion slightly missed expectations but still represented a 7.8% year-over-year growth [7] Operational Efficiency - The company is enhancing operational efficiency by transitioning to compressed natural gas (CNG) vehicles, with CNG accounting for approximately 20% of its recycling and solid waste collection fleet in 2023 [4] - RSG's fuel costs in 2023 were $541.6 million, constituting 3.6% of its revenues, down from 4.7% in 2022, indicating some success in managing fuel expenses [11] Market Position and Trends - The ongoing trends such as environmental concerns, industrialization, population growth, and government initiatives against illegal dumping are expected to benefit Republic Services [13] - The company is focused on increasing its recycling volume and has opened its first Polymer Centre to enhance plastic recycling across North America [13] Liquidity and Financial Health - As of the end of the first quarter of 2024, RSG's current ratio was 0.53, indicating potential challenges in meeting short-term obligations [8]