Dive Summary:

• Stericycle Inc., a medical waste management and services company, is positioned to benefit from an aging population, leading to an increased volume of waste in addition to a push for health care providers to outsource medical waste disposal to regulated waste management companies, according to an analyst at Fusion Research.
  The U.S. medical waste treatment market is expected to expand to $3.2 billion by 2015; Stericycle enjoys a 14% market share globally and generally experiences higher revenue growth in this niche industry compared to its competitors.
  The company is benefiting from its focus on high margin customers with recurring revenue, stable earnings from StrongPak, a new service for retailers, and steady acquisitions. This puts the company in a strong position for long-term growth and healthy capital gains.

From the article:

Stericycle has been trading at a premium compared to Republic Services and Waste Management due to its operation in a niche industry segment. It trades at a PE multiple of 35.50, higher than Republic's 26.43 and Waste Management's 22.62.

If we compare the financials of these three stocks, Stericycle's second quarter revenue growth of 12% year over year was significantly higher than Republic's 3% and Waste Management's 2%. High revenue growth translates into better margins for Stericycle. It focuses on high margin customers, which is quite evident from its operating margin of 26% as compared to the competitors' 15%.