ASX industrial stock Cleanaway Waste Management Ltd (ASX: CWY) has started the year in the green and is already up more than 3% in January.
Cleanaway, the nation's largest waste disposal and recycling provider, could also be worth a closer look for the defensive-minded investor.
Could this ASX industrial stock offer the kind of stability that many investors crave, particularly in uncertain economic times? Let's see what the experts think.
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ASX industrial stock offers defensive growth
Cleanaway is in the waste management and environmental services business. It has an enormous footprint, with approximately 260 facilities dotted around the country.
After wobbling throughout 2024 and touching a three-month low of $2.64 apiece on January 6 this year, Cleanaway shares have shot higher and are now up 3%.
Dylan Evans of Catapult Wealth recommends Cleanaway as a buy. In his tip to The Australian, the financial adviser noted the ASX industrial stock's market-leading position in the recycling industry.
A market leader in waste disposal and recycling, Cleanaway offers defensive cashflows and moderate growth. Government targets to increase recycling rates above 80% by 2030 should be supportive.
Cleanaway's FY24 numbers weren't too shabby, either. Sales were up around 7.5% year over year, driving a 15% lift in net profit.
That means that every dollar of revenue growth produced $2 in additional earnings for the year.
Brokers seem to like what they see, too. As reported by The Australian, CLSA rated Cleanaway a buy in November.
The firm valued Cleanaway at $3.16 per share.
Meanwhile, the consensus of analyst estimates rates the stock a buy, according to CommSec.
Positioned for 2025?
Evans' comments on the ASX industrial stock included a mention of the Government's desire to boost recycling rates.
As recently as December, the Federal Government announced it would contribute $250 million towards new and upgraded recycling infrastructure" through the ecycling Modernisation Fund (RMF).
This follows earlier announcements by Assistant Minister of Regional Development Anthony Chisholm in March last year.
The statement detailed a "new recycling and clean energy hub in Sydney… which will support more than 5,000 regional jobs and boost the Australian economy by up to $15 billion over the next 20 years".
Meanwhile, the consensus of analyst estimates projects the ASX industrial stock to grow earnings by 19% per year until 2027, where it is expected to earn 13.5 cents per share, and pay dividends of 8.8 cents per share.
Foolish takeout
For investors seeking stability with a dash of growth, experts think this ASX industrial stock is worth a closer look.
Its combination of 'defensive cashflows', strong market position, and government-backed tailwinds could make it an attractive addition to a diversified portfolio.
