Image source: Republic Services.

Republic Services (RSG 0.01%) is just as reliable as the services it provides its customers. Because of that, investors can count on it to deliver predictable results each quarter. That's just what the company produced in the second quarter, with its earnings right in line with guidance, leading the company to reaffirm its full-year outlook. 

Republic Services results: The raw numbers

Metric 

Q2 2016 Actuals

Q2 2015 Actuals

Growth (YOY)

Revenue

$2.35 billion

$2.31 billion

1.7%

Net income

$180.8 million

$190.3 million

(5%)

Earnings per share

$0.52

$0.54

(3.7%)

YOY = year over year. Data source: Republic Services, Inc.

What happened with Republic Services this quarter? 

Republic Services continues to show consistency:

  • Driving revenue growth was a 2% increase in average yield and a 0.5% increase in volumes. Meanwhile, core price increased revenue by 3.1%.
  • While earnings were down on a GAAP basis, after adjusting for restructuring charges they improved to $0.55 per share, which was right in line with guidance.
  • Republic's adjusted EBITDA margin was 28.3% of revenue, which matched the prior year's second quarter.
  • Republic Services generated $177.3 million of adjusted free cash flow during the quarter, which met its expectations. The company returned all of that cash flow, plus a little extra, to shareholders via $211 million in dividends and share repurchases.
  • The company priced $500 million of 2.9% notes due in 2026 and used that cash to make tender offers to purchase $575.4 million of its debt that had coupons between 5.7% and 7.4%. The company is taking advantage of low interest rates to refinance much higher cost debt.

What management had to say 

As CEO Donald Slager said about the quarter:

Our second quarter results continue to demonstrate the stability and predictability of our business, and the strength of our operating model. Strong pricing performance, positive volume growth and contributions from our strategic initiatives keep us well positioned to achieve our full year financial guidance.

Republic Services' steady-as-she-goes business model has it on pace to meet its full-year projections to grow revenue 2.5% to 3% while earnings per share grow to a range of $2.13 to $2.17, which is up 4.4% at the midpoint. While that's a solid result, it is far from peer leading.

Rival Waste Management (WM -0.52%), for example, recently reported another strong quarter. The company's second quarter, according to comments by CEO David Steiner, "mirrored the strong first quarter trends, as we again exceeded our revenue, earnings, and margin targets." Because of that, Waste Management is boosting its full-year guidance for cash flow and earnings per share with it expecting earnings to grow by 9% over last year at the mid-point. That suggests that Waste Management is growing twice as fast as Republic Services, which is impressive considering that it is roughly 50% larger in size.

Looking forward 

Republic Services might not be growing earnings quite as fast as Waste Management, but it has done a good job of growing its dividend. It is also boosting its payout by 7%, which marks the seventh straight year it has increased it. The company believes that the dividend increase reflects its confidence in future cash flows as well as its commitment to return cash to investors.