WASTE CONNECTIONS INC (WCN.CA) Stock Fundamental Analysis
TSX:WCN - Toronto Stock Exchange - CA94106B1013 - Common Stock - Currency: CAD
We assign a fundamental rating of 5 out of 10 to WCN. WCN was compared to 24 industry peers in the Commercial Services & Supplies industry. WCN has an excellent profitability rating, but there are concerns on its financial health. WCN is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WCN was profitable.
WCN had a positive operating cash flow in the past year.
Each year in the past 5 years WCN has been profitable.
WCN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.11%, WCN is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
WCN's Return On Equity of 7.85% is fine compared to the rest of the industry. WCN outperforms 66.67% of its industry peers.
WCN has a better Return On Invested Capital (7.47%) than 83.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WCN is in line with the industry average of 7.19%.
The 3 year average ROIC (7.10%) for WCN is below the current ROIC(7.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 7.85% | ||
| ROIC | 7.47% |
ROA(3y)4.08%
ROA(5y)3.58%
ROE(3y)9.84%
ROE(5y)8.27%
ROIC(3y)7.1%
ROIC(5y)6.62%
1.3 Margins
WCN's Profit Margin of 6.93% is fine compared to the rest of the industry. WCN outperforms 75.00% of its industry peers.
WCN's Profit Margin has declined in the last couple of years.
WCN has a better Operating Margin (19.16%) than 95.83% of its industry peers.
WCN's Operating Margin has improved in the last couple of years.
WCN has a better Gross Margin (42.02%) than 75.00% of its industry peers.
WCN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.16% | ||
| PM (TTM) | 6.93% | ||
| GM | 42.02% |
OM growth 3Y2.81%
OM growth 5Y2.48%
PM growth 3Y-11.67%
PM growth 5Y-8.02%
GM growth 3Y0.97%
GM growth 5Y0.56%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WCN is destroying value.
Compared to 1 year ago, WCN has about the same amount of shares outstanding.
The number of shares outstanding for WCN has been reduced compared to 5 years ago.
Compared to 1 year ago, WCN has a worse debt to assets ratio.
2.2 Solvency
WCN has an Altman-Z score of 3.26. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.26, WCN belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
WCN has a debt to FCF ratio of 7.11. This is a slightly negative value and a sign of low solvency as WCN would need 7.11 years to pay back of all of its debts.
WCN has a Debt to FCF ratio of 7.11. This is comparable to the rest of the industry: WCN outperforms 58.33% of its industry peers.
A Debt/Equity ratio of 1.05 is on the high side and indicates that WCN has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.05, WCN is in line with its industry, outperforming 50.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 3.26 |
ROIC/WACC0.76
WACC9.88%
2.3 Liquidity
A Current Ratio of 0.70 indicates that WCN may have some problems paying its short term obligations.
The Current ratio of WCN (0.70) is worse than 70.83% of its industry peers.
WCN has a Quick Ratio of 0.70. This is a bad value and indicates that WCN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.70, WCN is not doing good in the industry: 70.83% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
WCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.44%, which is quite good.
Measured over the past years, WCN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.90% on average per year.
Looking at the last year, WCN shows a quite strong growth in Revenue. The Revenue has grown by 10.75% in the last year.
WCN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.60% yearly.
EPS 1Y (TTM)12.44%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%8.65%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.5%
3.2 Future
WCN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.10% yearly.
The Revenue is expected to grow by 7.82% on average over the next years.
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.1%
Revenue Next Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.82%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 36.33, which means the current valuation is very expensive for WCN.
62.50% of the companies in the same industry are more expensive than WCN, based on the Price/Earnings ratio.
WCN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.28.
WCN is valuated quite expensively with a Price/Forward Earnings ratio of 29.06.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WCN is on the same level as its industry peers.
WCN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.33 | ||
| Fwd PE | 29.06 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WCN is on the same level as its industry peers.
WCN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.77 | ||
| EV/EBITDA | 18.47 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WCN does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of WCN may justify a higher PE ratio.
A more expensive valuation may be justified as WCN's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)3.22
PEG (5Y)3.05
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
With a yearly dividend of 0.71%, WCN is not a good candidate for dividend investing.
WCN's Dividend Yield is a higher than the industry average which is at 2.29.
Compared to an average S&P500 Dividend Yield of 2.42, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
On average, the dividend of WCN grows each year by 12.03%, which is quite nice.
WCN has been paying a dividend for at least 10 years, so it has a reliable track record.
WCN has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)12.03%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
49.31% of the earnings are spent on dividend by WCN. This is a bit on the high side, but may be sustainable.
The dividend of WCN is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP49.31%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
TSX:WCN (7/2/2025, 7:00:00 PM)
241.97
-12.41 (-4.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.49%
Inst Owner ChangeN/A
Ins Owners0.15%
Ins Owner ChangeN/A
Market Cap62.52B
Analysts75.29
Price Target284.99 (17.78%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend1.6
Dividend Growth(5Y)12.03%
DP49.31%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.64%
Min EPS beat(2)-5.03%
Max EPS beat(2)1.76%
EPS beat(4)3
Avg EPS beat(4)1.02%
Min EPS beat(4)-5.03%
Max EPS beat(4)4.9%
EPS beat(8)6
Avg EPS beat(8)1.14%
EPS beat(12)9
Avg EPS beat(12)1.6%
EPS beat(16)12
Avg EPS beat(16)1.57%
Revenue beat(2)0
Avg Revenue beat(2)-0.5%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.25%
Revenue beat(4)2
Avg Revenue beat(4)0.06%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.24%
Revenue beat(12)4
Avg Revenue beat(12)-0.23%
Revenue beat(16)8
Avg Revenue beat(16)0.15%
PT rev (1m)0%
PT rev (3m)38.82%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.7%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.33 | ||
| Fwd PE | 29.06 | ||
| P/S | 5.05 | ||
| P/FCF | 38.77 | ||
| P/OCF | 20.09 | ||
| P/B | 5.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.47 |
EPS(TTM)6.66
EY2.75%
EPS(NY)8.33
Fwd EY3.44%
FCF(TTM)6.24
FCFY2.58%
OCF(TTM)12.04
OCFY4.98%
SpS47.93
BVpS42.33
TBVpS-11.14
PEG (NY)3.22
PEG (5Y)3.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 7.85% | ||
| ROCE | 9.43% | ||
| ROIC | 7.47% | ||
| ROICexc | 7.52% | ||
| ROICexgc | 16.81% | ||
| OM | 19.16% | ||
| PM (TTM) | 6.93% | ||
| GM | 42.02% | ||
| FCFM | 13.02% |
ROA(3y)4.08%
ROA(5y)3.58%
ROE(3y)9.84%
ROE(5y)8.27%
ROIC(3y)7.1%
ROIC(5y)6.62%
ROICexc(3y)7.13%
ROICexc(5y)6.71%
ROICexgc(3y)16.04%
ROICexgc(5y)15.16%
ROCE(3y)8.97%
ROCE(5y)8.36%
ROICexcg growth 3Y4.71%
ROICexcg growth 5Y6.27%
ROICexc growth 3Y5.49%
ROICexc growth 5Y5.39%
OM growth 3Y2.81%
OM growth 5Y2.48%
PM growth 3Y-11.67%
PM growth 5Y-8.02%
GM growth 3Y0.97%
GM growth 5Y0.56%
F-Score5
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Debt/EBITDA | 2.86 | ||
| Cap/Depr | 92.25% | ||
| Cap/Sales | 12.1% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.85% | ||
| Profit Quality | 187.86% | ||
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 3.26 |
F-Score5
WACC9.88%
ROIC/WACC0.76
Cap/Depr(3y)94.39%
Cap/Depr(5y)92.61%
Cap/Sales(3y)12.05%
Cap/Sales(5y)12.09%
Profit Quality(3y)159.7%
Profit Quality(5y)199.37%
High Growth Momentum
Growth
EPS 1Y (TTM)12.44%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%8.65%
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.1%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.5%
Revenue Next Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.82%
EBIT growth 1Y12.58%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year80.4%
EBIT Next 3Y29.5%
EBIT Next 5Y20.06%
FCF growth 1Y8.63%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y12.66%
OCF growth 3Y9.49%
OCF growth 5Y7.67%