Investors interested in Waste Removal Services stocks are likely familiar with H20 (HTO) and Waste Management (WM). But which of these two stocks offers value investors a better bang for their buck right now?
H2O America (NASDAQ:HTO ) Q3 2025 Earnings Call October 28, 2025 2:00 PM EDT Company Participants Ann Kelly - CFO & Treasurer Andrew Walters - CEO & Director Bruce Hauk - President & COO Conference Call Participants Agnieszka Storozynski - Seaport Research Partners Ian Rapp - BofA Securities, Research Division Presentation Operator Good day, and thank you for standing by. Welcome to the H2O America Third Quarter Financial Results Call.
H2O America has a reputation for dividend growth dating back to the Johnson administration. The water utility plans to invest $2 billion over the next five years and recently completed a complementary acquisition. H2O America has a decent interest coverage ratio and ample liquidity.
H20 (HTO) came out with quarterly earnings of $0.75 per share, beating the Zacks Consensus Estimate of $0.71 per share. This compares to earnings of $0.66 per share a year ago.
H20 (HTO) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
H20 (HTO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
H20 (HTO) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #1 (Strong Buy).
H2O America offers a compelling value opportunity with strong financials, record earnings, and a 50+ year dividend growth streak, making it a Dividend King. Recent successful rate cases and ongoing capital investments support continued earnings and dividend growth, with a stable investment-grade credit rating reinforcing financial strength. HTO trades at lower valuations than peers, providing an attractive entry point for value-oriented investors seeking steady income and moderate capital appreciation.
HTO's fundamentals remain strong, with capex, earnings, and growth pipeline all exceeding expectations despite the recent stock price drop. The stock is now trading at a significant discount to its historical valuation and sector peers, offering an attractive entry point. Regulators have largely approved HTO's ambitious infrastructure investments, supporting ongoing earnings and rate base growth.
The Zacks Waste Removal Services industry is anticipated to gain from the rising need for ESG goals, technological developments and innovation in WTE technology. RSG, HTO and MEG are well-poised to gain from growing demands.
H2O America's rebrand clarifies its pure-play water utility focus, and recent results exceeded expectations with strong revenue and EPS growth. The company boasts an A-rated balance sheet, robust liquidity, and a $2 billion capex plan, supporting 5-7% annual EPS growth through 2029. Shares trade at a 14% discount to my fair value estimate, offering potential 13% annual total returns through 2027 if growth targets are met.