WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - NYSE:WM - US94106L1098 - Common Stock
200.54 USD
-0.14 (-0.07%)
200.54 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to WM. WM was compared to 82 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. While showing a medium growth rate, WM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WM had positive earnings in the past year.
In the past year WM had a positive cash flow from operations.
In the past 5 years WM has always been profitable.
In the past 5 years WM always reported a positive cash flow from operatings.
1.2 Ratios
WM's Return On Assets of 5.62% is fine compared to the rest of the industry. WM outperforms 73.17% of its industry peers.
WM's Return On Equity of 26.94% is amongst the best of the industry. WM outperforms 91.46% of its industry peers.
WM has a better Return On Invested Capital (8.48%) than 71.95% of its industry peers.
WM had an Average Return On Invested Capital over the past 3 years of 9.52%. This is in line with the industry average of 10.49%.
| 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
WM has a better Profit Margin (10.35%) than 84.15% of its industry peers.
In the last couple of years the Profit Margin of WM has grown nicely.
With an excellent Operating Margin value of 17.64%, WM belongs to the best of the industry, outperforming 91.46% of the companies in the same industry.
WM's Operating Margin has been stable in the last couple of years.
WM has a Gross Margin of 39.99%. This is in the better half of the industry: WM outperforms 69.51% 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WM is creating some value.
The number of shares outstanding for WM remains at a similar level compared to 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
WM has an Altman-Z score of 2.70. This is not the best score and indicates that WM is in the grey zone with still only limited risk for bankruptcy at the moment.
WM's Altman-Z score of 2.70 is in line compared to the rest of the industry. WM outperforms 57.32% of its industry peers.
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.
WM has a Debt to FCF ratio (9.73) which is comparable to the rest of the 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 Debt to Equity ratio of 2.36. This is amonst the worse of the industry: WM underperforms 81.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | 2.7 |
ROIC/WACC1.14
WACC7.41%
2.3 Liquidity
WM has a Current Ratio of 0.84. This is a bad value and indicates that WM is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of WM (0.84) is worse than 80.49% of its industry peers.
A Quick Ratio of 0.80 indicates that WM may have some problems paying its short term obligations.
WM has a Quick ratio of 0.80. This is in the lower half of the industry: WM underperforms 79.27% 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.
The Earnings Per Share has been growing by 10.29% on average over the past years. This is quite good.
Looking at the last year, WM shows a quite strong growth in Revenue. The Revenue has grown by 15.88% in the last year.
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 9.27% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.47% on average over the next years.
EPS Next Y6.86%
EPS Next 2Y9%
EPS Next 3Y10.64%
EPS Next 5Y9.27%
Revenue Next Year13.63%
Revenue Next 2Y9.4%
Revenue Next 3Y8.69%
Revenue Next 5Y7.47%
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
With a Price/Earnings ratio of 27.58, WM can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of WM is on the same level as its industry peers.
When comparing the Price/Earnings ratio of WM to the average of the S&P500 Index (26.13), we can say WM is valued inline with the index average.
The Price/Forward Earnings ratio is 23.35, which indicates a rather expensive current valuation of WM.
WM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. WM is cheaper than 60.98% of the companies in the same industry.
WM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.58 | ||
| Fwd PE | 23.35 |
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 | 33.63 | ||
| EV/EBITDA | 14.62 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WM does not grow enough to justify the current Price/Earnings ratio.
WM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.02
PEG (5Y)2.68
EPS Next 2Y9%
EPS Next 3Y10.64%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.65%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.61, WM pays a better dividend. On top of this WM pays more dividend than 81.71% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.39, WM is paying slightly less dividend.
| 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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%
EPS Next 3Y10.64%
200.54
-0.14 (-0.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.79%
Inst Owner Change0.33%
Ins Owners0.18%
Ins Owner Change2.41%
Market Cap80.78B
Revenue(TTM)24.78B
Net Income(TTM)2.56B
Analysts78.82
Price Target255.02 (27.17%)
Short Float %1.16%
Short Ratio3.01
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)-2.28%
PT rev (3m)-0.29%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)-1.63%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-1.02%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-1.94%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.58 | ||
| Fwd PE | 23.35 | ||
| P/S | 3.26 | ||
| P/FCF | 33.63 | ||
| P/OCF | 13.8 | ||
| P/B | 8.49 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.62 |
EPS(TTM)7.27
EY3.63%
EPS(NY)8.59
Fwd EY4.28%
FCF(TTM)5.96
FCFY2.97%
OCF(TTM)14.54
OCFY7.25%
SpS61.52
BVpS23.63
TBVpS-20.48
PEG (NY)4.02
PEG (5Y)2.68
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 | 2.7 |
F-Score4
WACC7.41%
ROIC/WACC1.14
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 Y6.86%
EPS Next 2Y9%
EPS Next 3Y10.64%
EPS Next 5Y9.27%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
Revenue Next Year13.63%
Revenue Next 2Y9.4%
Revenue Next 3Y8.69%
Revenue Next 5Y7.47%
EBIT growth 1Y3.11%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.99%
EBIT Next 3Y27.21%
EBIT Next 5Y17.63%
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 3 / 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 6.86% in the next year.
How sustainable is the dividend of WASTE MANAGEMENT INC (WM) stock?
The dividend rating of WASTE MANAGEMENT INC (WM) is 6 / 10 and the dividend payout ratio is 50.78%.