Introduction to Tox Free Solutions (ASX:TOX)

Claude Walker — Sat, 17 Nov 2012 06:23:28 +0000

Tox Free Solutions Limited (ASX: TOX) is a waste management company with 23 facilities Australia wide. TOX provides household waste collection, hazardous waste disposal and recycling, solid waste management and recycling, and liquid waste treatment. The recycling of hazardous waste chemicals has positive environmental benefit.

At the time of writing (Share price: $2.90) TOX has a dividend yield of just 1.4%, an earnings yield of 5% (PE 20), but the cashflow yield is 9.2%. Growth over the last two years has been spectacular with EPS up 29% pa on a Revenue increase of 32% pa. Analysts expect the profits underlying these ratios to continue to grow over the next two years based on a number of recent takeovers. The largest of these businesses is Dolarmatrix, which will contribute first full year revenue in 2012/13.

Tox Free Solutions as a growing business, offering highly specialised services, demand for which is driven by community concern and government legislation. There are strong barriers to new entrants based on the highly technical and costly nature of toxic waste recycling and disposal. The environmental benefits are a bonus.

Research provided by
August Investments Pty Ltd
(August Investments holds shares in TOX)

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Introduction to Tox Free Solutions (ASX:TOX)