GFL is a strong stock, and one of only two TSX-listed publicly listed waste management companies. This alone will support demand for the company's stock. It has been performing quite well since its IPO - up 21% since it went public.
GFL relies on growth through acquisitions. Since 2007, it has made more than 100 acquisitions and revenue has grown by a CAGR of 58% over the past three years. Growth however, has come at a cost – the company is highly leveraged. It has yet to turn a profit and is sitting on 4.6 billion in debt.
Revenue growth however remains strong. In its first quarter since going public, GFL grew revenue by 29% YOY. It also increased cash flows by 34% YOY and debt was reduced thanks in large part to proceeds from the IPO.
The company operates in a defensive industry, and as such is likely to outpeform even if the markets suffer a setback. Although debt remains an issue, it, along with competitor Waste Connections make for strong 1-2 duopoly in the industry.
Mat