WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
NYSE:WM - New York Stock Exchange, Inc. - US94106L1098 - Common Stock - Currency: USD
WM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 84 industry peers in the Commercial Services & Supplies industry. While WM has a great profitability rating, there are quite some 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.
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
With a decent Return On Assets value of 7.60%, WM is doing good in the industry, outperforming 76.83% of the companies in the same industry.
WM has a better Return On Equity (33.10%) than 93.90% of its industry peers.
The Return On Invested Capital of WM (10.95%) is better than 78.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 33.1% | ||
| ROIC | 10.95% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
WM's Profit Margin of 12.35% is amongst the best of the industry. WM outperforms 86.59% of its industry peers.
In the last couple of years the Profit Margin of WM has grown nicely.
WM has a Operating Margin of 19.83%. This is amongst the best in the industry. WM outperforms 91.46% of its industry peers.
WM's Operating Margin has improved in the last couple of years.
WM's Gross Margin of 39.33% is fine compared to the rest of the industry. WM outperforms 63.41% of its industry peers.
WM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.83% | ||
| PM (TTM) | 12.35% | ||
| GM | 39.33% |
OM growth 3Y5.8%
OM growth 5Y1.85%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y-3.63%
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 no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 3.72 indicates that WM is not in any danger for bankruptcy at the moment.
The Altman-Z score of WM (3.72) is better than 75.61% of its industry peers.
The Debt to FCF ratio of WM is 7.92, which is on the high side as it means it would take WM, 7.92 years of fcf income to pay off all of its debts.
WM has a Debt to FCF ratio (7.92) which is in line with its industry peers.
WM has a Debt/Equity ratio of 2.00. This is a high value indicating a heavy dependency on external financing.
WM's Debt to Equity ratio of 2.00 is on the low side compared to the rest of the industry. WM is outperformed by 82.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 7.92 | ||
| Altman-Z | 3.72 |
ROIC/WACC1.28
WACC8.53%
2.3 Liquidity
A Current Ratio of 0.89 indicates that WM may have some problems paying its short term obligations.
The Current ratio of WM (0.89) is worse than 82.93% of its industry peers.
A Quick Ratio of 0.85 indicates that WM may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.85, WM is doing worse than 78.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.80% over the past year.
Measured over the past years, WM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.29% on average per year.
WM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.01%.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.38% yearly.
EPS 1Y (TTM)16.8%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-2.3%
Revenue 1Y (TTM)8.01%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%12.96%
3.2 Future
The Earnings Per Share is expected to grow by 10.53% on average over the next years. This is quite good.
Based on estimates for the next years, WM will show a quite strong growth in Revenue. The Revenue will grow by 8.37% on average per year.
EPS Next Y9.23%
EPS Next 2Y11.38%
EPS Next 3Y10.95%
EPS Next 5Y10.53%
Revenue Next Year16.72%
Revenue Next 2Y11.05%
Revenue Next 3Y8.77%
Revenue Next 5Y8.37%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WM is valuated quite expensively with a Price/Earnings ratio of 32.33.
Compared to the rest of the industry, the Price/Earnings ratio of WM is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 29.75. WM is around the same levels.
WM is valuated quite expensively with a Price/Forward Earnings ratio of 29.60.
WM's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.44. WM is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.33 | ||
| Fwd PE | 29.6 |
4.2 Price Multiples
WM's Enterprise Value to EBITDA is on the same level as the industry average.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.62 | ||
| EV/EBITDA | 17.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of WM may justify a higher PE ratio.
PEG (NY)3.5
PEG (5Y)3.14
EPS Next 2Y11.38%
EPS Next 3Y10.95%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.44%. Purely for dividend investing, there may be better candidates out there.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.28. WM pays more dividend than 80.49% of the companies in the same industry.
WM's Dividend Yield is slightly below the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.44% |
5.2 History
On average, the dividend of WM grows each year by 8.45%, 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)8.45%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
WM pays out 45.06% of its income as dividend. This is a bit on the high side, but may be sustainable.
WM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP45.06%
EPS Next 2Y11.38%
EPS Next 3Y10.95%
233.78
+1 (+0.43%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners84.94%
Inst Owner Change1.45%
Ins Owners0.2%
Ins Owner Change2.71%
Market Cap93.83B
Analysts78.71
Price Target243.63 (4.21%)
Short Float %0.99%
Short Ratio2.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.44% |
Yearly Dividend2.81
Dividend Growth(5Y)8.45%
DP45.06%
Div Incr Years21
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.16%
Min EPS beat(2)-3.21%
Max EPS beat(2)0.88%
EPS beat(4)3
Avg EPS beat(4)5.21%
Min EPS beat(4)-3.21%
Max EPS beat(4)12.87%
EPS beat(8)3
Avg EPS beat(8)0.32%
EPS beat(12)5
Avg EPS beat(12)0.81%
EPS beat(16)8
Avg EPS beat(16)0.34%
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-3.36%
Max Revenue beat(2)-1.25%
Revenue beat(4)0
Avg Revenue beat(4)-2.73%
Min Revenue beat(4)-3.82%
Max Revenue beat(4)-1.25%
Revenue beat(8)0
Avg Revenue beat(8)-3.23%
Revenue beat(12)2
Avg Revenue beat(12)-2.29%
Revenue beat(16)3
Avg Revenue beat(16)-1.67%
PT rev (1m)2.29%
PT rev (3m)2.73%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-1.62%
EPS NY rev (1m)-4.3%
EPS NY rev (3m)-5.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.2%
Revenue NY rev (1m)3.66%
Revenue NY rev (3m)6.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.33 | ||
| Fwd PE | 29.6 | ||
| P/S | 4.39 | ||
| P/FCF | 44.62 | ||
| P/OCF | 17.84 | ||
| P/B | 11.76 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.16 |
EPS(TTM)7.23
EY3.09%
EPS(NY)7.9
Fwd EY3.38%
FCF(TTM)5.24
FCFY2.24%
OCF(TTM)13.11
OCFY5.61%
SpS53.28
BVpS19.88
TBVpS-6.44
PEG (NY)3.5
PEG (5Y)3.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 33.1% | ||
| ROCE | 14.16% | ||
| ROIC | 10.95% | ||
| ROICexc | 11.18% | ||
| ROICexgc | 17.47% | ||
| OM | 19.83% | ||
| PM (TTM) | 12.35% | ||
| GM | 39.33% | ||
| FCFM | 9.83% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y5.8%
OM growth 5Y1.85%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y-3.63%
F-Score8
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 7.92 | ||
| Debt/EBITDA | 2.5 | ||
| Cap/Depr | 147.5% | ||
| Cap/Sales | 14.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.45% | ||
| Profit Quality | 79.63% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 3.72 |
F-Score8
WACC8.53%
ROIC/WACC1.28
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)16.8%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-2.3%
EPS Next Y9.23%
EPS Next 2Y11.38%
EPS Next 3Y10.95%
EPS Next 5Y10.53%
Revenue 1Y (TTM)8.01%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%12.96%
Revenue Next Year16.72%
Revenue Next 2Y11.05%
Revenue Next 3Y8.77%
Revenue Next 5Y8.37%
EBIT growth 1Y17.75%
EBIT growth 3Y13.37%
EBIT growth 5Y9.37%
EBIT Next Year74.45%
EBIT Next 3Y26.35%
EBIT Next 5Y19.08%
FCF growth 1Y25.85%
FCF growth 3Y-3.92%
FCF growth 5Y0.98%
OCF growth 1Y19.95%
OCF growth 3Y7.51%
OCF growth 5Y6.83%