Pollution-Control Firms Will Clean Up

Article excerpt

LAST week's Earth Day observances drew pro-environmental comments from both President Bush and Democratic front-runner Bill Clinton. The president reiterated his support for a "cleaner, safer environment." Arkansas Governor Clinton called for a more aggressive environmental program out of Washington.

No matter how their remarks were received by conservation and environmental groups, Wall Street is increasingly viewing the environmental area, including pollution-control companies, as a growth industry over the remainder of the 1990s. The industry's growth should be driven by increasing federal regulation and more assertive public opinion, according to Charles LoCastro, an analyst with Donaldson, Lufkin & Jenrette Inc., an investment house.

Still, analysts such as Mr. LoCastro caution that "selectivity" is necessary in buying pollution-control stocks.

The industry itself is huge, made up of large publicly traded firms, smaller privately held companies, as well as modestly capitalized ventures traded mainly on the over-the-counter market.

Certain sectors, such as the solid waste area, are considered "old" by industry standards, with slower growth likely in the next few years. A far more lively area is the hazardous waste incinerator sector. Existing companies are expected to dominate this market for years to come, given extraordinarily expensive entry costs for start-up companies.

Among major players in the pollution-control area are Safety-Kleen Corporation, Rollins Environmental Services, Laidlaw Inc., Chemical Waste Management Inc., and Browning-Ferris Industries Inc. All of these companies are traded on the New York Stock Exchange.

Browning-Ferris, for example, is the second-largest provider of solid-waste services in the US, and the largest provider of medical waste services. The company operates over 50 transfer stations, 100 landfills in the US, and has some 100 environmental projects in development, according to Prudential Securities Inc. …