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 83 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
WCN had positive earnings in the past year.
In the past year WCN had a positive cash flow from operations.
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
The Return On Assets of WCN (3.11%) is better than 61.45% of its industry peers.
WCN has a Return On Equity of 7.85%. This is in the better half of the industry: WCN outperforms 63.86% of its industry peers.
With a decent Return On Invested Capital value of 7.47%, WCN is doing good in the industry, outperforming 61.45% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WCN is below the industry average of 11.67%.
The last Return On Invested Capital (7.47%) for WCN is above the 3 year average (7.10%), which is a sign of increasing profitability.
| 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
The Profit Margin of WCN (6.93%) is better than 74.70% of its industry peers.
In the last couple of years the Profit Margin of WCN has declined.
WCN has a Operating Margin of 19.16%. This is amongst the best in the industry. WCN outperforms 87.95% of its industry peers.
WCN's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 42.02%, WCN is doing good in the industry, outperforming 73.49% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WCN is destroying value.
The number of shares outstanding for WCN remains at a similar level compared to 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 3.34 indicates that WCN is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.34, WCN is doing good in the industry, outperforming 66.27% of the companies in the same industry.
The Debt to FCF ratio of WCN is 7.11, which is on the high side as it means it would take WCN, 7.11 years of fcf income to pay off all of its debts.
WCN has a better Debt to FCF ratio (7.11) than 65.06% 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 doing worse than 65.06% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 3.34 |
ROIC/WACC0.9
WACC8.28%
2.3 Liquidity
WCN has a Current 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.
Looking at the Current ratio, with a value of 0.70, WCN is doing worse than 86.75% of the companies in the same industry.
A Quick Ratio of 0.70 indicates that WCN may have some problems paying its short term obligations.
WCN has a Quick ratio of 0.70. This is amonst the worse of the industry: WCN underperforms 84.34% of its industry peers.
| 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.
WCN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.90% yearly.
WCN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.75%.
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
Based on estimates for the next years, WCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.10% on average per year.
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
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.
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
A Price/Earnings ratio of 37.80 indicates a quite expensive valuation of WCN.
WCN's Price/Earnings is on the same level as the industry average.
WCN is valuated rather expensively when we compare the Price/Earnings ratio to 27.52, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 30.23, the valuation of WCN can be described as expensive.
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 35.58, WCN is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.8 | ||
| Fwd PE | 30.23 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WCN.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WCN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.33 | ||
| EV/EBITDA | 19 |
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.
A more expensive valuation may be justified as WCN's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)3.35
PEG (5Y)3.18
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
With a yearly dividend of 0.73%, WCN is not a good candidate for dividend investing.
WCN's Dividend Yield is a higher than the industry average which is at 2.45.
Compared to an average S&P500 Dividend Yield of 2.35, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
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
49.31% of the earnings are spent on dividend by WCN. This is a bit on the high side, but may be sustainable.
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.
DP49.31%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
184.44
+1.06 (+0.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.49%
Inst Owner Change0.01%
Ins Owners0.15%
Ins Owner Change2.12%
Market Cap47.65B
Analysts75.29
Price Target208 (12.77%)
Short Float %0.83%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend1.17
Dividend Growth(5Y)12.03%
DP49.31%
Div Incr Years3
Div Non Decr Years3
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)0.08%
PT rev (3m)46.9%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-6.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.8 | ||
| Fwd PE | 30.23 | ||
| P/S | 5.25 | ||
| P/FCF | 40.33 | ||
| P/OCF | 20.9 | ||
| P/B | 5.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19 |
EPS(TTM)4.88
EY2.65%
EPS(NY)6.1
Fwd EY3.31%
FCF(TTM)4.57
FCFY2.48%
OCF(TTM)8.83
OCFY4.79%
SpS35.13
BVpS31.02
TBVpS-8.16
PEG (NY)3.35
PEG (5Y)3.18
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 | 3.34 |
F-Score5
WACC8.28%
ROIC/WACC0.9
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%