Clean Harbors (CLH) Operational Quality Rating (A) | 2025 Old York Registry
(A) | Industrials | Waste Management
By: Old York Financial
A Private Principal Report
the verdict
Old York Financial has assigned Clean Harbors (CLH) an Operational Quality (A) Rating.
Clean Harbors is the dominant force in hazardous waste management, particularly incineration and re-refining (Safety-Kleen). Their 2025 performance was defined by the successful ramp-up of their new Kimball incinerator, which added much-needed capacity to a market that is chronically undersupplied.
While their ROIC of 17.2% is excellent, the business is capital-intensive. They spent $410 Million on CapEx in 2025 to maintain their moats. They are a disciplined Equity Retraction player, retiring a record $250 Million in shares last year. They earn an (A) rather than a (AA) because of the higher volatility in their Safety-Kleen "Sustainability Solutions" segment, which is tied to base oil price fluctuations.
the old york analysis
owner earnings: the regulatory moat
Hazardous waste is the ultimate "Must-Pay" service. Companies like Intel and Exxon cannot simply "stop" disposing of toxic byproducts.
2025 Total Revenue: $6.03 Billion (Up 2.4% YoY)
2025 Net Cash from Operations: $866.7 Million
(-) Maintenance CapEx: ($410.0 Million) - Includes growth CapEx
(+) Depreciation & Amortization: ~$450.0 Million
OLD YORK OWNER EARNINGS: $906.7 Million
Analyst Note: incineration capacity is so tight, their "Growth CapEx" (like the Kimball expansion) functions almost like maintenance to protect their market share. The high D&A reflects the massive physical plant they command.
the equity retraction (share retirement)
The Reduction: Repurchased $250 Million in shares in 2025 at an average price of $222.
The New Buyback: Announced a $350 Million expansion of the program for 2026.
The Verdict: Clean Harbors does not pay a dividend. They prefer to use every cent of free cash for acquisitions (like the $130M Depot Connect deal) or retiring shares. This is pure Buffett-style capital allocation.
operational efficiency
ROIC: 17.2% (Consistent with our >15% Yardstick; clearing the hurdles easily).
Net Profit Margin: 6.5% (Muted by high interest and tax; segment margins are much stronger).
Operating Margin: 11.2% (Consolidated; but the Environmental Services segment hit 25.9% Adjusted EBITDA margin).
EPS Growth (1-Year): -1.9% (Muted by higher interest and Kimball ramp costs; but 2026 guidance points to a +10-15% rebound).
the fortress check
The Moat: You cannot build a hazardous waste incinerator in a suburban neighborhood. The permitting alone takes a decade. Clean Harbors owns the "permission to exist" in this space.
Pricing Power: High. Incineration utilization (excluding Kimball) hit 92% in Q3 2025. When the "pipe" is full, Clean Harbors dictates the price.
Sustainability Hedge: Through Safety-Kleen, they are the largest re-refiner of used oil. As companies face ESG mandates, they are required to use Clean Harbors' closed-loop systems.
why it’s rated (A)
Essentiality: They are the "Janitor of the Industrial Revolution." The business cannot be disrupted by AI or software.
ROIC Resilience: Maintaining a 17%+ ROIC while managing 100+ hazardous waste facilities is elite management.
The (A) Constraint: The Safety-Kleen segment (SKSS) is still somewhat of a "commodity" business. When oil prices drop, their margins in that segment feel the squeeze, which keeps them from the (AA) stability of a waste management or a Republic Services.
final determination
Rating: Old York Quality (A)
Classification: The Incineration Sovereign.
Clean Harbors is the "Toxic Toll Bridge." It receives an (A) because it owns the most valuable industrial permits in North America and has finally aligned its capital allocation with our "principal" mindset through aggressive share retirement.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager.
