GFL Environmental: An Aggressive Bet On The Waste Management Industry

GFL Environmental Inc (NYSE:GFL), is the fourth largest diversified environmental services company in North America. We believe the company to be reasonably priced despite being an aggressive bet relative to its peers. ​

Industry Analysis

Here are the main points of this report:  

• GFL's leverage is much higher than its peers. 
• Current valuation appears to be reasonable. 
• The overall stability of the industry should help offset some of the risks from GFL's high debt load. ​

We recently wrote a piece on Waste Connections (NYSE:WCN), titled, Waste Connections: A Stable Business For Uncertain Times. In that article, we go more into detail about the waste management industry with a competition analysis that includes GFL and therefore recommend you have a read to get a better understanding. Nonetheless, we will summarize some key points here.
 
The North American waste management market size is expected to reach $229.3 billion by 2027, from $208.0 billion in 2019, registering a CAGR of 5.3% from 2020 to 2027.
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We like the industry because the business of garbage removal is a natural monopoly. Natural monopolies arise typically due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry which can result in significant barriers to entry for potential competitors. 

*This is a premium seeking alpha article, so we can’t fully post it here.*   ​​

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