Critical Contrast: GFL Environmental (NYSE:GFL) versus Veralto (NYSE:VLTO)

Veralto (NYSE:VLTO) and GFL Environmental (NYSE:GFL) are both large-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, valuation, earnings and risk.

Dividends

Veralto pays an annual dividend of $0.44 per share and has a dividend yield of 0.4%. GFL Environmental pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Veralto pays out 12.3% of its earnings in the form of a dividend. GFL Environmental pays out 0.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Veralto has increased its dividend for 1 consecutive years and GFL Environmental has increased its dividend for 5 consecutive years.

Risk & Volatility

Veralto has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, GFL Environmental has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Veralto and GFL Environmental’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veralto	16.65%	41.45%	14.05%
GFL Environmental	48.53%	3.71%	1.42%

Earnings & Valuation

This table compares Veralto and GFL Environmental”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veralto	$5.36 billion	4.93	$833.00 million	$3.58	29.77
GFL Environmental	$8.08 billion	2.13	-$527.43 million	$6.35	7.47

Veralto has higher earnings, but lower revenue than GFL Environmental. GFL Environmental is trading at a lower price-to-earnings ratio than Veralto, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Veralto and GFL Environmental, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veralto	0	4	5	0	2.56
GFL Environmental	0	1	10	2	3.08

Veralto presently has a consensus target price of $113.57, indicating a potential upside of 6.56%. GFL Environmental has a consensus target price of $58.75, indicating a potential upside of 23.87%. Given GFL Environmental’s stronger consensus rating and higher probable upside, analysts plainly believe GFL Environmental is more favorable than Veralto.

Institutional and Insider Ownership

91.3% of Veralto shares are held by institutional investors. Comparatively, 64.7% of GFL Environmental shares are held by institutional investors. 0.4% of Veralto shares are held by company insiders. Comparatively, 8.7% of GFL Environmental shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

GFL Environmental beats Veralto on 11 of the 18 factors compared between the two stocks.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.

About GFL Environmental

GFL Environmental Inc. offers non-hazardous solid waste management and environmental services in Canada and the United States. It offers solid waste management, liquid waste management, and soil remediation services, including collection, transportation, transfer, recycling, and disposal services for municipal, residential, and commercial, and industrial customers. The company was incorporated in 2007 and is headquartered in Vaughan, Canada.