Thanksgiving stocks to watch: DAL, BUD, DIS ... >>> READ MORE

4 Stocks in Focus as Trump Aims to Dump Clean Power

Regulatory changes open up opportunities for investors

By , Zacks Investment Research

http://bit.ly/2mNNtUA

In his concerted effort to focus on “America first” principle, President Trump is likely to sign a new executive order tomorrow to bring some sweeping changes to his predecessor’s plan to curb global warming. These include the likely dismantling of the Clean Power Plan and annulment of some policy directives of the Environmental Protection Agency (EPA).

The strategic moves follow Trump’s first budget proposal, wherein he suggested trimming EPA’s funding by a third to $5.7 billion in 2018 and scrap all climate change research programs and partnerships. In addition, funding for the clean-up of hazardous substances was proposed to be reduced $330 million. Enforcement of EPA’s clean air and water laws was likely to be cut by $129 million.

The Clean Power Plan

In Aug 2015, President Obama introduced the Clean Power Plan to reduce carbon dioxide emissions from electricity by 32% by 2030 compared to 2005 levels. It was estimated that power plants accounted for nearly 40% of the harmful carbon dioxide emissions in the U.S. and a significant reduction in this pollutant was necessary to improve the quality of air.

The law encouraged higher investments in renewable energy, natural gas and nuclear power to shift from coal-fired power. However, the Supreme Court stayed the implementation of the plan in Feb 2016, pending judicial review by a federal appeals court.

The Trump administration intends to seek a longer ‘stay order’ on the court proceedings to either revise the plan or undo it completely. In addition, it further intends to revoke the EPA rule that sets mandate for greenhouse gas emissions for construction of new power plants. An Interior Department regulation, which keeps a tab on hydraulic fracturing of oil and gas wells on federal lands and requires firms to disclose the chemicals pumped underground and seal off waste water in storage tanks, is also on the anvil to be rescinded.

Pro-Growth Agenda

Such policy directives are widely based on the idea of creating more jobs and underscore Trump’s commitment to his campaign promises. By his own admission, climate change was a “hoax” and “…the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.” In order to turn the tables, the regulatory rollbacks are likely to lift the embargos and “job-killing restrictions” among the U.S. steel and auto manufacturers and make them more competitive in the global market.

Scott Pruitt, the head of the EPA, also echoed Trump and observed, “This is about making sure that we have a pro-growth and pro-environment approach to how we do regulation in this country.”

4 Waste Removal Stocks in Spotlight

Waste removal stocks have largely gained prominence with Obama’s environmental policies taking a backseat and Trump’s pro-growth agenda with regulatory rollbacks gaining cynosure. Let us have an overview of four such stocks in the industry that are likely to remain in focus in the near term.

Stocks in Focus as Trump Aims to Dump Clean Power: Waste Management, Inc. (WSM)

Headquartered in Houston, TX, Waste Management, Inc. (NYSE:WM) is the largest provider of comprehensive waste management services in North America. The company provides collection, transfer, recycling and resource recovery, as well as disposal services to nearly 20 million residential, commercial, industrial and municipal customers.

It is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the U.S.

This Zacks Rank #3 (Hold) stock has a Value Growth Momentum Score (VGM Score) of ‘B’ and a healthy long-term growth expectation of 9.5%. Earnings estimates for the current quarter moved up from 63 cents to 69 cents in the last two months, representing bullish investor sentiments. WM stock outperformed the Zacks categorized Waste Removal Services industry in the past six months with an average return of 13.2% compared with 9.2% gain for the latter.

Stocks in Focus as Trump Aims to Dump Clean Power: Waste Connections Inc (USA) (WCN)

Waste Connections Inc (USA) (NYSE:WCN) is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services across the U.S. and Canada.

The company also offers non-hazardous oilfield waste treatment, recovery and disposal services in various active natural resource producing areas in the country through its R360 Environmental Solutions subsidiary.

It carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Waste Connections has a healthy long-term growth expectation of 15.8%. Earnings estimates for the current quarter moved up from 63 cents to 68 cents in the last two months.

WCN stock yielded an average return of 14.2% during the last six months.

Stocks in Focus as Trump Aims to Dump Clean Power: Republic Services, Inc. (RSG)

Republic Services Inc. (NYSE:RSG), a Zacks Rank #3 stock, is the second largest domestic non-hazardous solid waste company in the U.S. It provides non-hazardous solid waste disposal services for commercial, industrial, municipal and residential applications across the country and Puerto Rico.

Republic Services has a modest long-term growth expectation of 9.8%.

RSG stock yielded an average return of 23.5% during the past six months.

Stocks in Focus as Trump Aims to Dump Clean Power: Clean Harbors Inc (CLH)

Headquartered in Massachusetts, Clean Harbors Inc (NYSE:CLH) is a leading provider of environmental, energy and industrial services in North America. The company serves a wide array of customers, including Fortune 500 companies and government agencies. It provides a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services.

The acquisition of Safety-Kleen has made Clean Harbors North America’s largest re-refiner and recycler of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. This Zacks Rank #3 stock has a healthy long-term growth expectation of 15.8%.

Clean Harbors yielded an average return of 14.6% during the past six months.

As Trump faced an unexpected setback in the healthcare reform, the regulatory rollbacks with the erstwhile environmental policy have gained an undue importance. Trump would surely like to exert his authority by overriding the proposed changes in the Clean Power Plan and ride on his “America First” doctrine to weed out any doubts regarding his future policies and programs.

This has brought the waste removal stocks in focus and investors should watch out for the future proceedings in this space to capitalize on potential investment opportunities that could give them a solid return on investment.

Zacks’ Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn’t? Last year’s market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Waste Management, Inc. (WM): Free Stock Analysis Report

Republic Services, Inc. (RSG): Free Stock Analysis Report

Clean Harbors, Inc. (CLH): Free Stock Analysis Report

Waste Connections, Inc. (WCN): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/4-stocks-in-focus-as-trump-aims-to-dump-clean-power/.

©2017 InvestorPlace Media, LLC