![]() ![]() Priced at 15 times earnings, Dover trades at a 22% discount to its five-year average P/E, and its dividend yield is 1.6%. Revenue this year is expected to grow 8.3% to $8.6 billion, with earnings up 11%. It’s also a big player in pumps, winches, hoists, commercial refrigerators and equipment for automotive repair. If you want a piece of Heil, you’ll have to buy shares of Dover Corp., the Illinois-based mini-conglomerate that bought into the garbage truck business in 1993. Workers at its factory in Fort Payne, Alabama, weld several tons of steel and machinery atop truck chassis and roll out the customized pieces of heavy-duty compacting and carting equipment to trash haulers around the world. Heil Environmental Industries has been one of the world’s largest makers of specialized sanitation vehicles since 1901. Illustration by PATRICK WELSH FOR FORBES HOW TO PLAY ITīy John Dobosz Wagering on society to keep churning out trash seems a safe bet-and unless we revert to tossing our refuse into the streets, garbage trucks have a secure future. It wasn’t until 2019, Hoffman says, that Houston-based archrival Waste Management (2021 sales: $18 billion) caught up with Republic’s aggressive landfill pricing. Those that could pay were self-identifying as profitable enough to become Republic acquisition targets. ![]() Operators that couldn’t afford it would go elsewhere. Vander Ark argued that Republic should dramatically increase its fees. In essence, Republic was selling its future profits too cheaply. The marginal cost of adding another few tons of trash to a landfill appeared deceptively low because it didn’t include the high expenses of opening new landfills. Never maximized routes.”Įarly on, the young consultant convinced then CEO Don Slager that Republic wasn’t charging independent trash haulers high enough “tipping fees” to dump their loads at Republic-owned landfills. Industrial waste has never priced assets as scarce. “But Jon brought something that they wouldn’t have figured out. “I’m a cynic about hiring consultants from McKinsey,” says Michael Hoffman, managing director at Baltimore’s Stifel Investments, who has followed the garbage business since 2008. ![]()
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