GFL Environmental Inc (TSX:GFL) (NYSE:GFL) shares have jumped 34% since Capital Ideas wrote about the company 18 months ago
Capital Ideas Media | February 4, 2022 | SmallCapPower: Timing is everything as far as investing is concerned, and GFL Environmental Inc.’s (TSX:GFL) (NYSE:GFL) initial public offering could not have been timed much worse.
(Originally published on Capital Ideas Media on August 4, 2020)
GFL, or Green For Life, went public at C$25.33 per share on March 3, 2020, less than two weeks before global equity markets plunged as COVID-19 infections began to spread throughout the world.
[Editor’s Note: Shares of GFL Environmental have jumped 34% since Capital Ideas wrote about the company 18 months ago.]
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GFL stock hit an all-time low of C$16.86 in early April 2020 but has since soared 137% to its current price of C$39.96 per share.
GFL Environmental, the fourth-largest diversified environmental services company in North America, provides non-hazardous solid waste management, infrastructure & soil remediation and liquid waste management services throughout Canada and in 23 states in the U.S.
About 74% of the Company’s revenue in 2019 came from residential and commercial garbage collections and landfills, or solid waste. No single customer accounted for more than about 3% of its total revenue last year.
During 2019, 53% of GFL’s revenue was derived from Canada, with the United States contributing the remainder.
Speaking of which, on June 24, 2020, GFL Environmental announced a significant, company-building acquisition of a portfolio of 36 transfer stations, 18 landfills and nearly 300 collection vehicles in 10 U.S. states for a total consideration of US$835 million. This opportunity was made possible when Waste Management Inc. was forced to divest certain assets as a condition of its merger with Advanced Disposal Services Inc.
GFL expects this pending purchase will contribute annualized revenue of approximately US$345 million.
GFL Environmental has managed to grow its revenue at a compound annual growth rate (CAGR) of 58% between 2017 and 2019, along with an adjusted EBITDA CAGR of 64%.
Given that the industry in which GFL operates is highly fragmented, investors can likely expected more, probably smaller, acquisitions in order to fuel future growth.
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