Waste Management (U.S.)
Waste Management (WM) is the leading private player in the US refuse and recycling market, with a 22% share of the industry, driven by local scale advantages.
- With more than 21 million customers, WM has acted as an industry consolidator in a still highly fragmented industry. This essential services provider benefits from local scale which enables operational benefits for sales and efficiency, opportunities for industry consolidation, and, lastly, as demonstrated in recent quarters – pricing power.
- The company’s end markets include residential, manufacturing and industrial sectors. The majority of revenues were seen to be resilient in the pandemic environment, with the company continuing to generate healthy cash flow, making WM a lower volatility defensive stock.
- The company has been named on Fortune’s “Change the World” list – companies that have made a sizeable impact on major social or environmental problems. WM is transitioning its truck fleet to natural gas to reduce emissions and deploying technology to increase route and operational efficiency.
- Innovative projects include methane emissions capture, next generation landfills with accelerated decomposition technology, re-processing and recycling of older landfills, and next-generation recycling plants with sensor or automation-based processes.
Schneider Electric (France)
Schneider is a leading global specialist in efficiency solutions across the energy management spectrum, with operations in more than 100 countries.
- Powered by the “digitization of everything” – technology driving the ability to measure, analyze, and therefore manage everything in real time – Schneider enables customers in a breadth of industries to realize powerful efficiencies and cost savings. Whether in the context of industrial automation, commercial building management, smart homes, smart grids, or data centers, “intelligent functionality” and connected systems can be put to work to optimize energy efficiency and infrastructure performance across a vast array of applications.
- Particularly appealing to customers is the open architecture and platform approach by Schneider, allowing for nimble adaptation to myriad customer needs. Schneider solutions can realize between 50% to 80% cost savings for engineering and maintenance and reduce carbon footprints by as much as 50%.
- As a business, the company has enjoyed resilient margins, consistent returns on capital, strong cashflow generation, and a solid track record of acquisitions. Tightening energy efficiency standards provide a supportive tailwind over the medium and long term. Incorporating recycled content into its products, with 12% of its revenues accounting for activities that contribute toward a circular economy, Schneider received the Award for the Circular Economy – Multinational at 2019’s World Economic Forum in Davos.
Idex Corporation (US)
Idex has a wide portfolio of mission-critical products largely focusing on water distribution and flow monitoring. This includes products such as leak detection, water audits, valves and flow meters.
- The global demand for water continues to rise as a result of population growth and industry stresses, further exacerbating the gap in water supply and demand. Idex should benefit from this imbalance because the company provides solutions to monitor water loss and to give greater security to water infrastructure assets to minimize water losses.
- The company has a high-quality management team which has been driving organic, and inorganic, growth. This team communicates clearly with investors and the business has historically generated high margins and returns-on-equity1, facilitating strong free-cash flow2 that has helped Idex expand its large footprint through acquisitions.
- A strong balance sheet, good access to liquidity, strength of assets, prudent capital deployment, and an overall robust financial position should continue to serve the company well.
Pax Global Environmental Markets Fund Top 10 Holdings
Holdings are subject to change.
This information is not a recommendation to buy or sell any security.
1Return on Equity: The amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporations’ profitability by revealing how much profit a company generates with the money shareholders have invested.
2Cash Flow is the increase or decrease in the amount of money a business, institution, or individual has. In finance, the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period.