Is Now The Time To Put Clean Harbors (NYSE:CLH) On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Clean Harbors (NYSE:CLH). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Clean Harbors with the means to add long-term value to shareholders.

Check out our latest analysis for Clean Harbors

How Fast Is Clean Harbors Growing Its Earnings Per Share?

Clean Harbors has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. Clean Harbors' EPS skyrocketed from US$5.66 to US$7.51, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 33%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Clean Harbors remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 16% to US$5.3b. That's encouraging news for the company!

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Clean Harbors.

Are Clean Harbors Insiders Aligned With All Shareholders?

Owing to the size of Clean Harbors, we wouldn't expect insiders to hold a significant proportion of the company. But we do take comfort from the fact that they are investors in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$601m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. For companies with market capitalisations between US$4.0b and US$12b, like Clean Harbors, the median CEO pay is around US$8.1m.

Clean Harbors' CEO took home a total compensation package of US$3.9m in the year prior to December 2022. That looks like a modest pay packet, and may hint at a certain respect for the interests of shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.

Does Clean Harbors Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Clean Harbors' strong EPS growth. If you still have your doubts, remember too that company insiders have a considerable investment aligning themselves with the shareholders and CEO pay is quite modest compared to similarly sized companiess. The overarching message here is that Clean Harbors has underlying strengths that make it worth a look at. Even so, be aware that Clean Harbors is showing 2 warning signs in our investment analysis , you should know about...

Although Clean Harbors certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.