WASTE CONNECTIONS INC (WCN) Stock Fundamental Analysis
NYSE:WCN - New York Stock Exchange, Inc. - CA94106B1013 - Common Stock
WCN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 83 industry peers in the Commercial Services & Supplies industry. WCN has an excellent profitability rating, but there are some minor concerns on its financial health. WCN shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year WCN was profitable.
WCN had a positive operating cash flow in the past year.
In the past 5 years WCN has always been profitable.
Each year in the past 5 years WCN had a positive operating cash flow.
1.2 Ratios
WCN's Return On Assets of 4.68% is fine compared to the rest of the industry. WCN outperforms 65.85% of its industry peers.
WCN has a Return On Equity of 11.38%. This is in the better half of the industry: WCN outperforms 70.73% of its industry peers.
WCN has a better Return On Invested Capital (7.29%) than 60.98% of its industry peers.
WCN had an Average Return On Invested Capital over the past 3 years of 6.66%. This is below the industry average of 10.08%.
The 3 year average ROIC (6.66%) for WCN is below the current ROIC(7.29%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.68% | ||
| ROE | 11.38% | ||
| ROIC | 7.29% |
ROA(3y)4.45%
ROA(5y)3.79%
ROE(3y)10.17%
ROE(5y)8.33%
ROIC(3y)6.66%
ROIC(5y)6.2%
1.3 Margins
Looking at the Profit Margin, with a value of 10.81%, WCN belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
WCN's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.57%, WCN belongs to the top of the industry, outperforming 90.24% of the companies in the same industry.
WCN's Operating Margin has been stable in the last couple of years.
WCN's Gross Margin of 41.78% is fine compared to the rest of the industry. WCN outperforms 74.39% 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 | 19.57% | ||
| PM (TTM) | 10.81% | ||
| GM | 41.78% |
OM growth 3Y4.3%
OM growth 5Y1.27%
PM growth 3Y36.26%
PM growth 5Y-3.06%
GM growth 3Y0.85%
GM growth 5Y-0.4%
2. Health
2.1 Basic Checks
WCN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
WCN has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WCN has been reduced compared to 5 years ago.
WCN has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.36 indicates that WCN is not in any danger for bankruptcy at the moment.
WCN's Altman-Z score of 3.36 is fine compared to the rest of the industry. WCN outperforms 67.07% of its industry peers.
The Debt to FCF ratio of WCN is 6.60, which is on the high side as it means it would take WCN, 6.60 years of fcf income to pay off all of its debts.
WCN has a better Debt to FCF ratio (6.60) than 60.98% of its industry peers.
A Debt/Equity ratio of 0.99 indicates that WCN is somewhat dependend on debt financing.
The Debt to Equity ratio of WCN (0.99) is worse than 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 6.6 | ||
| Altman-Z | 3.36 |
ROIC/WACC0.99
WACC7.4%
2.3 Liquidity
A Current Ratio of 0.77 indicates that WCN may have some problems paying its short term obligations.
The Current ratio of WCN (0.77) is worse than 89.02% of its industry peers.
WCN has a Quick Ratio of 0.77. This is a bad value and indicates that WCN is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of WCN (0.77) is worse than 84.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.40% over the past year.
The Earnings Per Share has been growing by 10.62% 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 10.68%.
The Revenue has been growing by 10.26% on average over the past years. This is quite good.
EPS 1Y (TTM)19.4%
EPS 3Y16.5%
EPS 5Y10.62%
EPS Q2Q%15.38%
Revenue 1Y (TTM)10.68%
Revenue growth 3Y13.78%
Revenue growth 5Y10.26%
Sales Q2Q%13.26%
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 13.53% yearly.
Based on estimates for the next years, WCN will show a quite strong growth in Revenue. The Revenue will grow by 8.80% on average per year.
EPS Next Y16.43%
EPS Next 2Y14.53%
EPS Next 3Y13.75%
EPS Next 5Y13.53%
Revenue Next Year11.15%
Revenue Next 2Y9.3%
Revenue Next 3Y8.49%
Revenue Next 5Y8.8%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 37.74, WCN can be considered very expensive at the moment.
WCN's Price/Earnings ratio is in line with the industry average.
WCN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 32.55, which means the current valuation is very expensive for WCN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WCN is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 24.44. WCN is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.74 | ||
| Fwd PE | 32.55 |
4.2 Price Multiples
WCN's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as WCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.28 | ||
| EV/EBITDA | 19.39 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WCN has a very decent profitability rating, which may justify a higher PE ratio.
WCN's earnings are expected to grow with 13.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.3
PEG (5Y)3.55
EPS Next 2Y14.53%
EPS Next 3Y13.75%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.68%, which is pretty low.
WCN's Dividend Yield is a higher than the industry average which is at 2.09.
Compared to an average S&P500 Dividend Yield of 2.28, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
5.2 History
On average, the dividend of WCN grows each year by 12.63%, which is quite nice.
WCN has paid a dividend for at least 10 years, which is a reliable track record.
WCN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)12.63%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
WCN pays out 31.38% of its income as dividend. This is a sustainable payout ratio.
WCN's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP31.38%
EPS Next 2Y14.53%
EPS Next 3Y13.75%
WASTE CONNECTIONS INC
NYSE:WCN (1/21/2025, 8:04:00 PM)
Premarket: 179 +0.12 (+0.07%)178.88
+0.64 (+0.36%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners90.14%
Inst Owner Change-0.04%
Ins Owners0.14%
Ins Owner Change-4.47%
Market Cap46.16B
Analysts74.74
Price Target190.59 (6.55%)
Short Float %0.74%
Short Ratio1.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
Yearly Dividend1.05
Dividend Growth(5Y)12.63%
DP31.38%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.68%
Min EPS beat(2)2.46%
Max EPS beat(2)4.9%
EPS beat(4)4
Avg EPS beat(4)2.86%
Min EPS beat(4)1.25%
Max EPS beat(4)4.9%
EPS beat(8)6
Avg EPS beat(8)1.5%
EPS beat(12)9
Avg EPS beat(12)1.72%
EPS beat(16)13
Avg EPS beat(16)2.48%
Revenue beat(2)2
Avg Revenue beat(2)0.62%
Min Revenue beat(2)0.41%
Max Revenue beat(2)0.84%
Revenue beat(4)2
Avg Revenue beat(4)0.16%
Min Revenue beat(4)-0.61%
Max Revenue beat(4)0.84%
Revenue beat(8)3
Avg Revenue beat(8)-0.17%
Revenue beat(12)6
Avg Revenue beat(12)0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.44%
PT rev (1m)-1.6%
PT rev (3m)32.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.99%
EPS NY rev (1m)0%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.74 | ||
| Fwd PE | 32.55 | ||
| P/S | 5.31 | ||
| P/FCF | 37.28 | ||
| P/OCF | 20.83 | ||
| P/B | 5.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.39 |
EPS(TTM)4.74
EY2.65%
EPS(NY)5.5
Fwd EY3.07%
FCF(TTM)4.8
FCFY2.68%
OCF(TTM)8.59
OCFY4.8%
SpS33.69
BVpS32.01
TBVpS-6.37
PEG (NY)2.3
PEG (5Y)3.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.68% | ||
| ROE | 11.38% | ||
| ROCE | 9.28% | ||
| ROIC | 7.29% | ||
| ROICexc | 7.34% | ||
| ROICexgc | 16.08% | ||
| OM | 19.57% | ||
| PM (TTM) | 10.81% | ||
| GM | 41.78% | ||
| FCFM | 14.24% |
ROA(3y)4.45%
ROA(5y)3.79%
ROE(3y)10.17%
ROE(5y)8.33%
ROIC(3y)6.66%
ROIC(5y)6.2%
ROICexc(3y)6.71%
ROICexc(5y)6.31%
ROICexgc(3y)15.2%
ROICexgc(5y)14.17%
ROCE(3y)8.48%
ROCE(5y)7.89%
ROICexcg growth 3Y8.66%
ROICexcg growth 5Y5.11%
ROICexc growth 3Y8.56%
ROICexc growth 5Y4.22%
OM growth 3Y4.3%
OM growth 5Y1.27%
PM growth 3Y36.26%
PM growth 5Y-3.06%
GM growth 3Y0.85%
GM growth 5Y-0.4%
F-Score5
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 6.6 | ||
| Debt/EBITDA | 2.92 | ||
| Cap/Depr | 89.28% | ||
| Cap/Sales | 11.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.25% | ||
| Profit Quality | 131.68% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 3.36 |
F-Score5
WACC7.4%
ROIC/WACC0.99
Cap/Depr(3y)94.66%
Cap/Depr(5y)92.37%
Cap/Sales(3y)12.13%
Cap/Sales(5y)12.19%
Profit Quality(3y)147.84%
Profit Quality(5y)192.24%
High Growth Momentum
Growth
EPS 1Y (TTM)19.4%
EPS 3Y16.5%
EPS 5Y10.62%
EPS Q2Q%15.38%
EPS Next Y16.43%
EPS Next 2Y14.53%
EPS Next 3Y13.75%
EPS Next 5Y13.53%
Revenue 1Y (TTM)10.68%
Revenue growth 3Y13.78%
Revenue growth 5Y10.26%
Sales Q2Q%13.26%
Revenue Next Year11.15%
Revenue Next 2Y9.3%
Revenue Next 3Y8.49%
Revenue Next 5Y8.8%
EBIT growth 1Y21.08%
EBIT growth 3Y18.68%
EBIT growth 5Y11.66%
EBIT Next Year97.25%
EBIT Next 3Y32.83%
EBIT Next 5Y22.73%
FCF growth 1Y18.46%
FCF growth 3Y17.05%
FCF growth 5Y6.63%
OCF growth 1Y14.91%
OCF growth 3Y14.72%
OCF growth 5Y8.55%