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. While WCN belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, WCN is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WCN had positive earnings in the past year.
WCN had a positive operating cash flow in the past year.
In the past 5 years WCN has always been profitable.
In the past 5 years WCN always reported a positive cash flow from operatings.
1.2 Ratios
WCN's Return On Assets of 3.12% is fine compared to the rest of the industry. WCN outperforms 75.00% of its industry peers.
The Return On Equity of WCN (7.86%) is better than 75.00% of its industry peers.
With an excellent Return On Invested Capital value of 7.53%, WCN belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WCN is in line with the industry average of 8.20%.
The 3 year average ROIC (7.10%) for WCN is below the current ROIC(7.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 7.86% | ||
| ROIC | 7.53% |
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 has a better Profit Margin (6.92%) than 83.33% of its industry peers.
WCN's Profit Margin has declined in the last couple of years.
WCN has a Operating Margin of 19.13%. This is amongst the best in the industry. WCN outperforms 95.83% of its industry peers.
In the last couple of years the Operating Margin of WCN has grown nicely.
WCN has a Gross Margin of 41.79%. This is in the better half of the industry: WCN outperforms 70.83% of its industry peers.
In the last couple of years the Gross Margin of WCN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.13% | ||
| PM (TTM) | 6.92% | ||
| GM | 41.79% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WCN is creating some value.
Compared to 1 year ago, WCN has about the same amount of shares outstanding.
Compared to 5 years ago, WCN has less shares outstanding
The debt/assets ratio for WCN is higher compared to a year ago.
2.2 Solvency
WCN has an Altman-Z score of 3.52. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
WCN has a Altman-Z score of 3.52. This is amongst the best in the industry. WCN outperforms 87.50% of its industry peers.
The Debt to FCF ratio of WCN is 6.89, which is on the high side as it means it would take WCN, 6.89 years of fcf income to pay off all of its debts.
WCN's Debt to FCF ratio of 6.89 is in line compared to the rest of the industry. WCN outperforms 54.17% of its industry peers.
WCN has a Debt/Equity ratio of 1.03. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WCN (1.03) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.03 | ||
| Debt/FCF | 6.89 | ||
| Altman-Z | 3.52 |
ROIC/WACC1.06
WACC7.08%
2.3 Liquidity
WCN has a Current Ratio of 0.65. This is a bad value and indicates that WCN is not financially healthy enough and could expect problems in meeting its short term obligations.
WCN's Current ratio of 0.65 is on the low side compared to the rest of the industry. WCN is outperformed by 70.83% of its industry peers.
WCN has a Quick Ratio of 0.65. 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 0.62, WCN is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.32% over the past year.
The Earnings Per Share has been growing by 11.90% on average over the past years. This is quite good.
WCN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.19%.
Measured over the past years, WCN shows a quite strong growth in Revenue. The Revenue has been growing by 10.60% on average per year.
EPS 1Y (TTM)14.32%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%4.5%
Revenue 1Y (TTM)11.19%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%11.04%
3.2 Future
Based on estimates for the next years, WCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.25% on average per year.
Based on estimates for the next years, WCN will show a small growth in Revenue. The Revenue will grow by 7.92% on average per year.
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.25%
Revenue Next Year7.2%
Revenue Next 2Y7.08%
Revenue Next 3Y7.69%
Revenue Next 5Y7.92%
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
Based on the Price/Earnings ratio of 40.48, the valuation of WCN can be described as expensive.
Based on the Price/Earnings ratio, WCN is valued a bit cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.33, WCN is valued a bit more expensive.
The Price/Forward Earnings ratio is 36.37, which means the current valuation is very expensive for WCN.
The rest of the industry has a similar Price/Forward Earnings ratio as WCN.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.37, WCN is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.48 | ||
| Fwd PE | 36.37 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WCN.
WCN's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.71 | ||
| EV/EBITDA | 20.24 |
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.
WCN has an outstanding profitability rating, which may justify a higher PE ratio.
WCN's earnings are expected to grow with 13.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.58
PEG (5Y)3.4
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.67%, which is pretty low.
WCN's Dividend Yield is a higher than the industry average which is at 2.42.
Compared to an average S&P500 Dividend Yield of 2.51, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
5.2 History
The dividend of WCN is nicely growing with an annual growth rate of 12.03%!
WCN has paid a dividend for at least 10 years, which is a reliable track record.
As WCN did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)12.03%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
WCN pays out 48.94% of its income as dividend. 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.
DP48.94%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
TSX:WCN (4/21/2025, 7:00:00 PM)
269.21
-4.15 (-1.52%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.98%
Inst Owner ChangeN/A
Ins Owners0.14%
Ins Owner ChangeN/A
Market Cap69.55B
Analysts75.29
Price Target203.47 (-24.42%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
Yearly Dividend1.63
Dividend Growth(5Y)12.03%
DP48.94%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.29%
Min EPS beat(2)-5.03%
Max EPS beat(2)2.46%
EPS beat(4)3
Avg EPS beat(4)1.29%
Min EPS beat(4)-5.03%
Max EPS beat(4)4.9%
EPS beat(8)6
Avg EPS beat(8)0.93%
EPS beat(12)8
Avg EPS beat(12)1.29%
EPS beat(16)12
Avg EPS beat(16)1.75%
Revenue beat(2)1
Avg Revenue beat(2)0.29%
Min Revenue beat(2)-0.25%
Max Revenue beat(2)0.84%
Revenue beat(4)2
Avg Revenue beat(4)0.25%
Min Revenue beat(4)-0.25%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.22%
Revenue beat(12)5
Avg Revenue beat(12)-0.06%
Revenue beat(16)9
Avg Revenue beat(16)0.23%
PT rev (1m)-0.89%
PT rev (3m)-25.72%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-5.14%
EPS NY rev (1m)-0.49%
EPS NY rev (3m)-2.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.48 | ||
| Fwd PE | 36.37 | ||
| P/S | 5.62 | ||
| P/FCF | 42.71 | ||
| P/OCF | 22.47 | ||
| P/B | 6.37 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.24 |
EPS(TTM)6.65
EY2.47%
EPS(NY)7.4
Fwd EY2.75%
FCF(TTM)6.3
FCFY2.34%
OCF(TTM)11.98
OCFY4.45%
SpS47.94
BVpS42.24
TBVpS-11.19
PEG (NY)3.58
PEG (5Y)3.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 7.86% | ||
| ROCE | 9.51% | ||
| ROIC | 7.53% | ||
| ROICexc | 7.56% | ||
| ROICexgc | 17.03% | ||
| OM | 19.13% | ||
| PM (TTM) | 6.92% | ||
| GM | 41.79% | ||
| FCFM | 13.15% |
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 | 1.03 | ||
| Debt/FCF | 6.89 | ||
| Debt/EBITDA | 2.81 | ||
| Cap/Depr | 90.74% | ||
| Cap/Sales | 11.84% | ||
| Interest Coverage | 5.71 | ||
| Cash Conversion | 77.65% | ||
| Profit Quality | 189.93% | ||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 3.52 |
F-Score5
WACC7.08%
ROIC/WACC1.06
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)14.32%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%4.5%
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.25%
Revenue 1Y (TTM)11.19%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%11.04%
Revenue Next Year7.2%
Revenue Next 2Y7.08%
Revenue Next 3Y7.69%
Revenue Next 5Y7.92%
EBIT growth 1Y14.87%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year81.58%
EBIT Next 3Y29.51%
EBIT Next 5Y20.05%
FCF growth 1Y-1.67%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y4.8%
OCF growth 3Y9.49%
OCF growth 5Y7.67%