Cleanaway kicking goals for green investors

Is Cleanaway Waste Management Ltd (ASX: CWY) a top ASX share for sustainable investors?

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I grew up in South Australia where a container deposit scheme has been in place since the late 70's and "collecting cans" after a day at the footy was a rite of passage. It's quite staggering that this simple and sensible recycling initiative took so long to take hold in other parts of the country. New South Wales kicked off their "Return and Earn "scheme back in 2017 and this morning NSW Energy and Environment Minister, Matt Kean, was spruiking some early wins. 2 billion containers in 19 months which translates to roughly 1 in 2 adults engaging with the scheme.

Cleanaway Waste Management Ltd (ASX: CWY), in a joint venture with Norwegian multinational Tomra Systems ASA, was appointed by the NSW government to provide logistical services to the reverse vending machines used as collection points. This includes handling, transport, processing, recycling and data services.

General Manager for solid waste, David Clancy, told the Sydney Morning Herald that "collections were approaching half of all eligible drinks sold" and that "the three billion mark is likely to be crossed before year's end". That translates to a lot of containers being recycled for re-use and avoiding landfill.

Cleanaway has a great story to tell here but it's only part of the story. Cleanaway is a large national company that works across a wide remit, providing solutions nationally for just about every type of waste you can think of. Investors looking for companies with solid sustainability credentials should consider taking a closer look at Cleanaway.

Current investors will be pleased with the 42.25% increase in share value over the past 52 weeks. For potential investors you'll find CWY trading at $2.38 at lunchtime today and you'll receive a fully franked 1.28% dividend yield.

There were several highlights to come from Cleanaway's half-year presentation back in February including the ongoing successful integration of the recently acquired Toxfree and some pleasing metrics. This included gross revenue (+46.4%), NPAT (+ 35.1%) and cash flow (+55%) all up versus the first half of 2018. Management expected the momentum to continue for the remainder of the 18/19 financial year.

Foolish takeaway

As we as communities strive to be more be sustainable and less wasteful, it's conceivable to see future opportunities for Cleanaway to stay firmly on a sustainable growth path. The success of the "Return and Earn" program and the acquisition of Toxfree serve to highlight just some of those possibilities.

Motley Fool contributor JWoodward has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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