Stifel's analyst Ian Gillies has begun coverage of Secure Waste (SECYF, Financial), giving it a Buy rating and setting a price target of C$18. The firm highlights the company's financial strength, underscored by its successful history of reducing the number of outstanding shares. This strategic approach may lead to a significant increase in the stock's valuation, suggesting considerable potential for gains. The analyst's positive assessment is based on a belief that the company is poised for growth, supported by its current financial positioning.
SECYF Key Business Developments
Release Date: May 02, 2025
- Adjusted EBITDA: $121 million, representing a 33% EBITDA margin.
- Net Revenue: $371 million, up 3% year over year.
- Net Income: $38 million or $0.16 per share.
- Discretionary Free Cash Flow: $67 million, reflecting a 55% conversion of adjusted EBITDA.
- Share Buybacks: 5.3 million shares repurchased for $79 million.
- Substantial Issuer Bid: $200 million launched in April for share repurchase.
- Debt-to-EBITDA Ratio: 1.6 times, or 1.3 times excluding leases.
- Dividend: $0.10 per share, with an annualized dividend of $0.40 per share.
- Organic Growth Capital Program: Increased to $125 million for 2025.
- Facility Expansion: Clearwater terminal capacity increased to 75,000 barrels per day.
- Metals Recycling Acquisition: Completed for $162 million, doubling scrap metal handling capacity.
- Landfill Disposal Volumes: 846,000 tons safely contained.
- Terminalling and Pipeline Volumes: Averaged 128,000 barrels per day, up 16% pro forma.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Secure Waste Infrastructure Corp (SECYF, Financial) reported a solid start to 2025 with a 33% EBITDA margin and stable cash flow despite recessionary concerns and lower commodity prices.
- The company increased its adjusted EBITDA per share by 24% year over year, driven by an 18% reduction in weighted average shares outstanding and strong infrastructure utilization.
- Secure Waste Infrastructure Corp (SECYF) repurchased 5.3 million common shares, reflecting strong conviction in the intrinsic value of the business and commitment to returning capital to shareholders.
- The company announced an increase in its 2025 organic growth capital program to $125 million, supported by a 10-year commercial agreement with a senior Montney producer.
- Secure Waste Infrastructure Corp (SECYF) completed the acquisition of an Edmonton-based metal recycling business, strengthening processing capabilities and improving logistics through investment in railcars.
Negative Points
- Extreme cold weather in February temporarily softened some activity levels, impacting processing volumes.
- The company decided not to proceed with a previously announced $18 million acquisition in the metal recycling business due to final due diligence outcomes.
- Secure Waste Infrastructure Corp (SECYF) maintained its 2025 full-year adjusted EBITDA guidance range, reflecting a cautious stance due to macroeconomic volatility, including uncertainties surrounding tariffs and recessionary concerns.
- The divestiture of 29 facilities on February 1, 2024, partially offset revenue gains from acquisitions and higher pricing.
- The company faces ongoing macroeconomic challenges, including potential impacts from tariffs and a recent decline in commodity prices, which could affect customer activity levels.
