WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WM - US94106L1098 - Common Stock
215.61 USD
+3.56 (+1.68%)
216.66 USD
+1.05 (+0.49%)
WM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 82 industry peers in the Commercial Services & Supplies industry. WM has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, WM is valued expensive at the moment. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
In the past year WM had a positive cash flow from operations.
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
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 92.68% of its industry peers.
WM has a better Return On Invested Capital (8.48%) than 73.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WM is in line with the industry average of 10.13%.
| 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's Profit Margin of 10.35% 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.
The Operating Margin of WM (17.64%) is better than 91.46% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
WM has a better Gross Margin (39.99%) than 67.07% 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.
WM has about the same amout of shares outstanding than it did 1 year ago.
WM has less shares outstanding than it did 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 2.80. 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 has a Altman-Z score (2.80) which is in line with its industry peers.
The Debt to FCF ratio of WM is 9.73, which is on the high side as it means it would take WM, 9.73 years of fcf income to pay off all of its debts.
WM has a Debt to FCF ratio of 9.73. This is comparable to the rest of the industry: WM outperforms 58.54% of its industry peers.
A Debt/Equity ratio of 2.36 is on the high side and indicates that WM has dependencies on debt financing.
With a Debt to Equity ratio value of 2.36, WM is not doing good in the industry: 82.93% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | 2.8 |
ROIC/WACC1.1
WACC7.68%
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.
Looking at the Current ratio, with a value of 0.84, WM is doing worse than 79.27% of the companies in the same industry.
WM has a Quick 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 Quick ratio of WM (0.80) is worse than 75.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
WM shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
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.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.38% yearly.
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
Based on estimates for the next years, WM will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.90% on average per year.
Based on estimates for the next years, WM will show a small growth in Revenue. The Revenue will grow by 7.38% on average per year.
EPS Next Y6.79%
EPS Next 2Y8.99%
EPS Next 3Y10.67%
EPS Next 5Y8.9%
Revenue Next Year15.17%
Revenue Next 2Y10.22%
Revenue Next 3Y8.68%
Revenue Next 5Y7.38%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 29.66 indicates a quite expensive valuation of WM.
Compared to the rest of the industry, the Price/Earnings ratio of WM is on the same level as its industry peers.
WM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.56.
WM is valuated quite expensively with a Price/Forward Earnings ratio of 25.11.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WM indicates a somewhat cheap valuation: WM is cheaper than 60.98% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of WM to the average of the S&P500 Index (23.79), we can say WM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.66 | ||
| Fwd PE | 25.11 |
4.2 Price Multiples
WM's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.16 | ||
| EV/EBITDA | 15.46 |
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.
The decent profitability rating of WM may justify a higher PE ratio.
PEG (NY)4.37
PEG (5Y)2.88
EPS Next 2Y8.99%
EPS Next 3Y10.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.65%, WM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.93, WM pays a better dividend. On top of this WM pays more dividend than 81.71% of the companies listed in the same industry.
WM's Dividend Yield is comparable with the S&P500 average which is at 1.87.
| 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 paid a dividend for at least 10 years, which is 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 2Y8.99%
EPS Next 3Y10.67%
215.61
+3.56 (+1.68%)
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 Cap86.86B
Revenue(TTM)24.78B
Net Income(TTM)2.56B
Analysts81.05
Price Target249.31 (15.63%)
Short Float %1.13%
Short Ratio2.37
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)-2.24%
PT rev (3m)-4.47%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-1.24%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)-0.88%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)1.35%
Revenue NY rev (3m)-0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.66 | ||
| Fwd PE | 25.11 | ||
| P/S | 3.5 | ||
| P/FCF | 36.16 | ||
| P/OCF | 14.83 | ||
| P/B | 9.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.46 |
EPS(TTM)7.27
EY3.37%
EPS(NY)8.59
Fwd EY3.98%
FCF(TTM)5.96
FCFY2.77%
OCF(TTM)14.54
OCFY6.74%
SpS61.52
BVpS23.63
TBVpS-20.47
PEG (NY)4.37
PEG (5Y)2.88
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
WACC7.68%
ROIC/WACC1.1
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 Y6.79%
EPS Next 2Y8.99%
EPS Next 3Y10.67%
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 2Y10.22%
Revenue Next 3Y8.68%
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 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 6.79% 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%.