WASTE CONNECTIONS INC (WCN.CA) Stock Fundamental Analysis
TSX:WCN - Toronto Stock Exchange - CA94106B1013 - Common Stock - Currency: CAD
Taking everything into account, WCN scores 5 out of 10 in our fundamental rating. WCN was compared to 24 industry peers in the Commercial Services & Supplies industry. WCN scores excellent on profitability, but 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
In the past year WCN was profitable.
In the past year WCN had a positive cash flow from operations.
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 3.12%, WCN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
WCN's Return On Equity of 7.86% is fine compared to the rest of the industry. WCN outperforms 70.83% of its industry peers.
WCN's Return On Invested Capital of 7.53% is amongst the best of the industry. WCN outperforms 83.33% of its industry peers.
WCN had an Average Return On Invested Capital over the past 3 years of 7.10%. This is in line with the industry average of 8.06%.
The last Return On Invested Capital (7.53%) for WCN is above the 3 year average (7.10%), which is a sign of increasing profitability.
| 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.
Looking at the Operating Margin, with a value of 19.13%, WCN belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
In the last couple of years the Operating Margin of WCN has grown nicely.
WCN has a better Gross Margin (41.79%) than 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.
WCN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WCN is higher compared to a year ago.
2.2 Solvency
WCN has an Altman-Z score of 3.44. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
WCN has a Altman-Z score of 3.44. 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 has a Debt to FCF ratio (6.89) which is comparable to the rest of the industry.
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 | 3.44 |
ROIC/WACC1.04
WACC7.21%
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 has a Current ratio of 0.65. This is in the lower half of the industry: WCN underperforms 66.67% 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.
WCN has a worse Quick ratio (0.62) than 62.50% of its industry peers.
| 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.
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.
The Revenue has grown by 11.19% in the past year. This is quite good.
The Revenue has been growing by 10.60% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 11.13% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.63% on average over the next years.
EPS Next Y11.85%
EPS Next 2Y12.66%
EPS Next 3Y14.11%
EPS Next 5Y11.13%
Revenue Next Year7.33%
Revenue Next 2Y7.03%
Revenue Next 3Y7.41%
Revenue Next 5Y7.63%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 39.21, the valuation of WCN can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of WCN is on the same level as its industry peers.
When comparing the Price/Earnings ratio of WCN to the average of the S&P500 Index (29.63), we can say WCN is valued slightly more expensively.
With a Price/Forward Earnings ratio of 35.06, WCN can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as WCN.
When comparing the Price/Forward Earnings ratio of WCN to the average of the S&P500 Index (22.68), we can say WCN is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.21 | ||
| Fwd PE | 35.06 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WCN.
Based on the Price/Free Cash Flow ratio, WCN is valued a bit cheaper than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.33 | ||
| EV/EBITDA | 19.68 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of WCN may justify a higher PE ratio.
WCN's earnings are expected to grow with 14.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.31
PEG (5Y)3.29
EPS Next 2Y12.66%
EPS Next 3Y14.11%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.66%, which is pretty low.
Compared to an average industry Dividend Yield of 2.05, WCN pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
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.
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
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, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP48.94%
EPS Next 2Y12.66%
EPS Next 3Y14.11%
TSX:WCN (2/21/2025, 7:00:00 PM)
266.64
+0.37 (+0.14%)
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 Cap68.81B
Analysts75.56
Price Target200.84 (-24.68%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
Yearly Dividend1.17
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)-1.05%
Min EPS beat(2)-4.56%
Max EPS beat(2)2.46%
EPS beat(4)3
Avg EPS beat(4)1.41%
Min EPS beat(4)-4.56%
Max EPS beat(4)4.9%
EPS beat(8)6
Avg EPS beat(8)0.99%
EPS beat(12)8
Avg EPS beat(12)1.33%
EPS beat(16)12
Avg EPS beat(16)1.78%
Revenue beat(2)1
Avg Revenue beat(2)0.25%
Min Revenue beat(2)-0.34%
Max Revenue beat(2)0.84%
Revenue beat(4)2
Avg Revenue beat(4)0.22%
Min Revenue beat(4)-0.34%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.23%
Revenue beat(12)5
Avg Revenue beat(12)-0.07%
Revenue beat(16)9
Avg Revenue beat(16)0.23%
PT rev (1m)-26.68%
PT rev (3m)-25.2%
EPS NQ rev (1m)-1.25%
EPS NQ rev (3m)1.15%
EPS NY rev (1m)-2.51%
EPS NY rev (3m)-2.51%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.21 | ||
| Fwd PE | 35.06 | ||
| P/S | 5.43 | ||
| P/FCF | 41.33 | ||
| P/OCF | 21.75 | ||
| P/B | 6.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.68 |
EPS(TTM)6.8
EY2.55%
EPS(NY)7.61
Fwd EY2.85%
FCF(TTM)6.45
FCFY2.42%
OCF(TTM)12.26
OCFY4.6%
SpS49.06
BVpS43.24
TBVpS-11.45
PEG (NY)3.31
PEG (5Y)3.29
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 | 3.44 |
F-Score5
WACC7.21%
ROIC/WACC1.04
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 Y11.85%
EPS Next 2Y12.66%
EPS Next 3Y14.11%
EPS Next 5Y11.13%
Revenue 1Y (TTM)11.19%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%11.04%
Revenue Next Year7.33%
Revenue Next 2Y7.03%
Revenue Next 3Y7.41%
Revenue Next 5Y7.63%
EBIT growth 1Y14.87%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year81.47%
EBIT Next 3Y29.65%
EBIT Next 5Y20.69%
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%