WASTE CONNECTIONS INC (WCN) Stock Fundamental Analysis
NYSE:WCN - New York Stock Exchange, Inc. - CA94106B1013 - Common Stock - Currency: USD
Taking everything into account, WCN scores 5 out of 10 in our fundamental rating. WCN was compared to 84 industry peers in the Commercial Services & Supplies industry. WCN has an excellent profitability rating, 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.
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 3.12%, WCN is in the better half of the industry, outperforming 63.41% of the companies in the same industry.
WCN has a better Return On Equity (7.86%) than 65.85% of its industry peers.
The Return On Invested Capital of WCN (7.53%) is better than 63.41% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WCN is below the industry average of 10.12%.
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 Profit Margin of 6.92%. This is in the better half of the industry: WCN outperforms 75.61% of its industry peers.
In the last couple of years the Profit Margin of WCN has declined.
WCN has a Operating Margin of 19.13%. This is amongst the best in the industry. WCN outperforms 89.02% of its industry peers.
WCN's Operating Margin has improved in the last couple of years.
The Gross Margin of WCN (41.79%) is better than 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 | 19.13% | ||
| 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.
WCN has about the same amout of shares outstanding than it did 1 year ago.
WCN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, WCN has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.44 indicates that WCN is not in any danger for bankruptcy at the moment.
The Altman-Z score of WCN (3.44) is better than 70.73% of its industry peers.
WCN has a debt to FCF ratio of 6.89. This is a slightly negative value and a sign of low solvency as WCN would need 6.89 years to pay back of all of its debts.
WCN has a better Debt to FCF ratio (6.89) than 62.20% 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.
Looking at the Debt to Equity ratio, with a value of 1.03, WCN is doing worse than 64.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.03 | ||
| Debt/FCF | 6.89 | ||
| Altman-Z | 3.44 |
ROIC/WACC1.05
WACC7.19%
2.3 Liquidity
A Current Ratio of 0.65 indicates that WCN may have some problems paying its short term obligations.
WCN has a worse Current ratio (0.65) than 90.24% of its industry peers.
A Quick Ratio of 0.62 indicates that WCN may have some problems paying its short term obligations.
The Quick ratio of WCN (0.62) is worse than 86.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
WCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.32%, which is quite good.
The Earnings Per Share has been growing by 11.90% on average over the past years. This is quite good.
Looking at the last year, WCN shows a quite strong growth in Revenue. The Revenue has grown by 11.19% in the last year.
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
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 39.12, which means the current valuation is very expensive for WCN.
WCN's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 29.63. WCN is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 34.97, which means the current valuation is very expensive for WCN.
WCN's Price/Forward Earnings ratio is in line with the industry average.
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 | 39.12 | ||
| Fwd PE | 34.97 |
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 | 41.23 | ||
| EV/EBITDA | 19.68 |
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.
WCN's earnings are expected to grow with 14.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.3
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.
WCN's Dividend Yield is a higher than the industry average which is at 2.12.
With a Dividend Yield of 0.66, WCN pays less dividend than the S&P500 average, which is at 2.29.
| 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 last 3 years.
Dividend Growth(5Y)12.03%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
48.94% 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, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP48.94%
EPS Next 2Y12.66%
EPS Next 3Y14.11%
187.38
-0.47 (-0.25%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.98%
Inst Owner Change-0.38%
Ins Owners0.14%
Ins Owner Change-1.89%
Market Cap48.36B
Analysts75.56
Price Target137.68 (-26.52%)
Short Float %0.85%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.66% |
Yearly Dividend1.17
Dividend Growth(5Y)12.03%
DP48.94%
Div Incr Years3
Div Non Decr Years3
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)-27.76%
PT rev (3m)-29.2%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)-1.69%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.12 | ||
| Fwd PE | 34.97 | ||
| P/S | 5.42 | ||
| P/FCF | 41.23 | ||
| P/OCF | 21.7 | ||
| P/B | 6.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.68 |
EPS(TTM)4.79
EY2.56%
EPS(NY)5.36
Fwd EY2.86%
FCF(TTM)4.55
FCFY2.43%
OCF(TTM)8.64
OCFY4.61%
SpS34.56
BVpS30.46
TBVpS-8.07
PEG (NY)3.3
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
WACC7.19%
ROIC/WACC1.05
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%