WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WM - US94106L1098 - Common Stock
216.34 USD
-1.98 (-0.91%)
216.5 USD
+0.16 (+0.07%)
WM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 81 industry peers in the Commercial Services & Supplies industry. While WM belongs to the best of the industry regarding profitability, there are concerns on its financial health. WM is quite expensive at the moment. It does show a decent growth rate. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
WM had positive earnings in the past year.
WM had a positive operating cash flow in the past year.
WM had positive earnings in each of the past 5 years.
In the past 5 years WM always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WM (5.62%) is better than 75.31% of its industry peers.
WM has a better Return On Equity (26.94%) than 92.59% of its industry peers.
With a decent Return On Invested Capital value of 8.48%, WM is doing good in the industry, outperforming 72.84% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WM is in line with the industry average of 10.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 26.94% | ||
| ROIC | 8.48% |
ROA(3y)6.77%
ROA(5y)6.33%
ROE(3y)33.11%
ROE(5y)28.98%
ROIC(3y)9.52%
ROIC(5y)9.04%
1.3 Margins
With an excellent Profit Margin value of 10.35%, WM belongs to the best of the industry, outperforming 86.42% of the companies in the same industry.
In the last couple of years the Profit Margin of WM has grown nicely.
WM has a better Operating Margin (17.64%) than 91.36% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
The Gross Margin of WM (39.99%) is better than 66.67% of its industry peers.
In the last couple of years the Gross Margin of WM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.64% | ||
| PM (TTM) | 10.35% | ||
| GM | 39.99% |
OM growth 3Y4.47%
OM growth 5Y1.08%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y0.4%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WM is still creating some value.
WM has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WM has been reduced compared to 5 years ago.
The debt/assets ratio for WM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.80 indicates that WM is not a great score, but indicates only limited risk for bankruptcy at the moment.
WM has a Altman-Z score (2.80) which is comparable to the rest of the industry.
WM has a debt to FCF ratio of 9.73. This is a negative value and a sign of low solvency as WM would need 9.73 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.73, WM is in line with its industry, outperforming 59.26% of the companies in the same industry.
WM has a Debt/Equity ratio of 2.36. This is a high value indicating a heavy dependency on external financing.
WM has a worse Debt to Equity ratio (2.36) than 81.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | 2.8 |
ROIC/WACC1.11
WACC7.64%
2.3 Liquidity
A Current Ratio of 0.84 indicates that WM may have some problems paying its short term obligations.
The Current ratio of WM (0.84) is worse than 77.78% of its industry peers.
A Quick Ratio of 0.80 indicates that WM may have some problems paying its short term obligations.
WM's Quick ratio of 0.80 is on the low side compared to the rest of the industry. WM is outperformed by 75.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for WM have decreased by 0.00% in the last year.
WM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.29% yearly.
The Revenue has grown by 15.88% in the past year. This is quite good.
The Revenue has been growing slightly by 7.38% on average over the past years.
EPS 1Y (TTM)0%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%1.02%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
3.2 Future
The Earnings Per Share is expected to grow by 8.90% on average over the next years. This is quite good.
WM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.38% yearly.
EPS Next Y6.72%
EPS Next 2Y9.02%
EPS Next 3Y10.75%
EPS Next 5Y8.9%
Revenue Next Year15.17%
Revenue Next 2Y10.25%
Revenue Next 3Y8.69%
Revenue Next 5Y7.38%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 29.76 indicates a quite expensive valuation of WM.
WM's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.38, WM is valued at the same level.
With a Price/Forward Earnings ratio of 25.18, WM can be considered very expensive at the moment.
WM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. WM is cheaper than 60.49% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.83, WM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.76 | ||
| Fwd PE | 25.18 |
4.2 Price Multiples
WM's Enterprise Value to EBITDA ratio is in line with the industry average.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.29 | ||
| EV/EBITDA | 15.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.43
PEG (5Y)2.89
EPS Next 2Y9.02%
EPS Next 3Y10.75%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.65%.
Compared to an average industry Dividend Yield of 0.91, WM pays a better dividend. On top of this WM pays more dividend than 82.72% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, WM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.65% |
5.2 History
On average, the dividend of WM grows each year by 7.85%, which is quite nice.
WM has been paying a dividend for at least 10 years, so it has a reliable track record.
WM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.85%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
WM pays out 50.78% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of WM is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP50.78%
EPS Next 2Y9.02%
EPS Next 3Y10.75%
216.34
-1.98 (-0.91%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.62%
Inst Owner Change-1.3%
Ins Owners0.18%
Ins Owner Change0.48%
Market Cap87.16B
Revenue(TTM)24.78B
Net Income(TTM)2.56B
Analysts81.05
Price Target249.68 (15.41%)
Short Float %1.34%
Short Ratio2.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.65% |
Yearly Dividend3.01
Dividend Growth(5Y)7.85%
DP50.78%
Div Incr Years21
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.21%
Min EPS beat(2)-4.76%
Max EPS beat(2)-1.66%
EPS beat(4)1
Avg EPS beat(4)-3.52%
Min EPS beat(4)-7.87%
Max EPS beat(4)0.19%
EPS beat(8)4
Avg EPS beat(8)0.84%
EPS beat(12)4
Avg EPS beat(12)-0.96%
EPS beat(16)6
Avg EPS beat(16)-0.28%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-3.82%
Max Revenue beat(2)-1.83%
Revenue beat(4)0
Avg Revenue beat(4)-2.73%
Min Revenue beat(4)-4.46%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-2.73%
Revenue beat(12)0
Avg Revenue beat(12)-3.06%
Revenue beat(16)2
Avg Revenue beat(16)-2.4%
PT rev (1m)-2.1%
PT rev (3m)-4.33%
EPS NQ rev (1m)-0.26%
EPS NQ rev (3m)-1.24%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)-0.95%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)1.35%
Revenue NY rev (3m)-0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.76 | ||
| Fwd PE | 25.18 | ||
| P/S | 3.52 | ||
| P/FCF | 36.29 | ||
| P/OCF | 14.88 | ||
| P/B | 9.16 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.5 |
EPS(TTM)7.27
EY3.36%
EPS(NY)8.59
Fwd EY3.97%
FCF(TTM)5.96
FCFY2.76%
OCF(TTM)14.54
OCFY6.72%
SpS61.52
BVpS23.63
TBVpS-20.47
PEG (NY)4.43
PEG (5Y)2.89
Graham Number62.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 26.94% | ||
| ROCE | 10.97% | ||
| ROIC | 8.48% | ||
| ROICexc | 8.52% | ||
| ROICexgc | 15.42% | ||
| OM | 17.64% | ||
| PM (TTM) | 10.35% | ||
| GM | 39.99% | ||
| FCFM | 9.69% |
ROA(3y)6.77%
ROA(5y)6.33%
ROE(3y)33.11%
ROE(5y)28.98%
ROIC(3y)9.52%
ROIC(5y)9.04%
ROICexc(3y)9.65%
ROICexc(5y)9.16%
ROICexgc(3y)16.08%
ROICexgc(5y)15.26%
ROCE(3y)12.3%
ROCE(5y)11.69%
ROICexgc growth 3Y1.2%
ROICexgc growth 5Y0.78%
ROICexc growth 3Y-2.68%
ROICexc growth 5Y-3.51%
OM growth 3Y4.47%
OM growth 5Y1.08%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y0.4%
F-Score4
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Debt/EBITDA | 3.16 | ||
| Cap/Depr | 125.83% | ||
| Cap/Sales | 13.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.28% | ||
| Profit Quality | 93.68% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 2.8 |
F-Score4
WACC7.64%
ROIC/WACC1.11
Cap/Depr(3y)136.42%
Cap/Depr(5y)120.43%
Cap/Sales(3y)13.98%
Cap/Sales(5y)12.66%
Profit Quality(3y)81.63%
Profit Quality(5y)99.46%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%1.02%
EPS Next Y6.72%
EPS Next 2Y9.02%
EPS Next 3Y10.75%
EPS Next 5Y8.9%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
Revenue Next Year15.17%
Revenue Next 2Y10.25%
Revenue Next 3Y8.69%
Revenue Next 5Y7.38%
EBIT growth 1Y3.11%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.63%
EBIT Next 3Y26.68%
EBIT Next 5Y17.52%
FCF growth 1Y43.75%
FCF growth 3Y-3.92%
FCF growth 5Y0.98%
OCF growth 1Y33.52%
OCF growth 3Y7.51%
OCF growth 5Y6.83%
WASTE MANAGEMENT INC / WM FAQ
What is the fundamental rating for WM stock?
ChartMill assigns a fundamental rating of 4 / 10 to WM.
Can you provide the valuation status for WASTE MANAGEMENT INC?
ChartMill assigns a valuation rating of 2 / 10 to WASTE MANAGEMENT INC (WM). This can be considered as Overvalued.
Can you provide the profitability details for WASTE MANAGEMENT INC?
WASTE MANAGEMENT INC (WM) has a profitability rating of 7 / 10.
What is the expected EPS growth for WASTE MANAGEMENT INC (WM) stock?
The Earnings per Share (EPS) of WASTE MANAGEMENT INC (WM) is expected to grow by 6.72% in the next year.
How sustainable is the dividend of WASTE MANAGEMENT INC (WM) stock?
The dividend rating of WASTE MANAGEMENT INC (WM) is 7 / 10 and the dividend payout ratio is 50.78%.