Republic Services RSG stock has gained 9.6% in the past three months. The stock has outpaced the industry and the Zacks S&P 500 Composite's 3.9% and 1.3% rallies, respectively.
3-Month Share Price Performance
Let us delve deeper into the factors that have contributed to the company’s outperformance.
Prudent Pricing Execution
RSG delivered core price gains on related revenues of 6.8% and 6.4% during the first and second quarters of 2026, driven by open market pricing of 8.4% and 7.8%, respectively. In both quarters, total revenue average yield reached 3.4%, remaining ahead of cost inflation. Underlying margin expanded 90 basis points for both quarters on the back of core pricing execution, resulting in an adjusted EBITDA margin of 32.1% amid volume and commodity challenges. The company is bent on incorporating predictive AI models to calculate tailored pricing across localized markets, maximizing price retention while reducing customer churn.
Capital Allocation & Buyouts
In the first half of 2026, Republic Services spent $860 million in acquisitions and hiked the 2026 buyout investment goal to more than $1.2 billion, targeted mainly on Recycling & Waste alongside Environmental Solutions assets. The company returned more than $1 billion to shareholders via dividends and repurchases during the first half of 2026, including repurchasing nearly 1% of outstanding shares. The company has raised its annual dividend over the past 23 years consecutively on the back of persistent cash flow.
Operational Momentum
Investments made by the company in AI, digital routing and the RISE platform are targeted at enhancing route efficiency, service execution and operating leverage. Management anticipates these investments to deliver at least $100 million in annual cost benefits by 2028. The lower recycled commodity prices are offset by Polymer Center volume gains. In the second quarter of 2026, RSG commenced operations for two renewable natural gas projects with another two expected by the year-end, supporting the company’s long-term growth trajectory. Republic Services had more than 250 units of electric collection vehicles at the end of the second quarter of 2026 and is on track to surpass 300 units by the end of the year.
Zacks Rank & Stocks to Consider
RSG currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader Zacks Business Services sector include Bright Horizons Family Solutions BFAM and CBIZ CBZ, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bright Horizons Family Solutions has a long-term earnings growth expectation of 13.9%. BFAM delivered a trailing four-quarter earnings surprise of 7.6%, on average.
CBIZ has a long-term earnings growth expectation of 11.6%. CBZ delivered a trailing four-quarter earnings surprise of 8.9%, on average.
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Republic Services, Inc. (RSG): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).