WASTE MANAGEMENT INC (WM)
US94106L1098 - Common Stock
Overall WM gets a fundamental rating of 5 out of 10. We evaluated WM against 84 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 has a correct valuation and a medium growth rate.
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.
Each year in the past 5 years WM has been profitable.
WM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WM (7.60%) is better than 79.76% of its industry peers.
WM has a Return On Equity of 33.10%. This is amongst the best in the industry. WM outperforms 94.05% of its industry peers.
WM's Return On Invested Capital of 10.77% is fine compared to the rest of the industry. WM outperforms 79.76% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WM is in line with the industry average of 9.90%.
The last Return On Invested Capital (10.77%) for WM is above the 3 year average (9.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 33.1% | ||
| ROIC | 10.77% |
ROA(3y)6.8%
ROA(5y)6.3%
ROE(3y)30.51%
ROE(5y)27.05%
ROIC(3y)9.61%
ROIC(5y)8.95%
1.3 Margins
The Profit Margin of WM (12.35%) is better than 86.90% of its industry peers.
WM's Profit Margin has declined in the last couple of years.
WM has a better Operating Margin (19.83%) than 92.86% of its industry peers.
In the last couple of years the Operating Margin of WM has remained more or less at the same level.
Looking at the Gross Margin, with a value of 39.33%, WM is in the better half of the industry, outperforming 67.86% of the companies in the same industry.
In the last couple of years the Gross Margin of WM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.83% | ||
| PM (TTM) | 12.35% | ||
| GM | 39.33% |
OM growth 3Y4.32%
OM growth 5Y0.41%
PM growth 3Y4.69%
PM growth 5Y-2.66%
GM growth 3Y-6.85%
GM growth 5Y-3.77%
2. Health
2.1 Basic Checks
WM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WM has less shares outstanding
The number of shares outstanding for WM has been reduced compared to 5 years ago.
Compared to 1 year ago, WM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.62 indicates that WM is not in any danger for bankruptcy at the moment.
The Altman-Z score of WM (3.62) is better than 70.24% 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.
With a Debt to FCF ratio value of 7.92, WM perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
WM has a Debt/Equity ratio of 2.00. This is a high value indicating a heavy dependency on external financing.
WM has a Debt to Equity ratio of 2.00. This is amonst the worse of the industry: WM underperforms 82.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 7.92 | ||
| Altman-Z | 3.62 |
ROIC/WACC1.34
WACC8.03%
2.3 Liquidity
A Current Ratio of 0.89 indicates that WM may have some problems paying its short term obligations.
With a Current ratio value of 0.89, WM is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
WM has a Quick Ratio of 0.89. This is a bad value and indicates that WM is not financially healthy enough and could expect problems in meeting its short term obligations.
WM has a Quick ratio of 0.85. This is in the lower half of the industry: WM underperforms 79.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
WM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.43%, which is quite impressive.
The Earnings Per Share has been growing by 8.07% on average over the past years. This is quite good.
Looking at the last year, WM shows a small growth in Revenue. The Revenue has grown by 6.17% in the last year.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.49% yearly.
EPS 1Y (TTM)26.43%
EPS 3Y15.38%
EPS 5Y8.07%
EPS Q2Q%20.25%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y10.31%
Revenue growth 5Y6.49%
Sales Q2Q%7.91%
3.2 Future
The Earnings Per Share is expected to grow by 11.59% 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 6.50% yearly.
EPS Next Y22.19%
EPS Next 2Y15.85%
EPS Next 3Y14.01%
EPS Next 5Y11.59%
Revenue Next Year6.62%
Revenue Next 2Y8.62%
Revenue Next 3Y7.7%
Revenue Next 5Y6.5%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
The Price/Earnings ratio is 29.97, which means the current valuation is very expensive for WM.
WM's Price/Earnings is on the same level as the industry average.
WM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.53, which is the current average of the S&P500 Index.
WM is valuated quite expensively with a Price/Forward Earnings ratio of 26.23.
Based on the Price/Forward Earnings ratio, WM is valued a bit cheaper than 60.71% 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 23.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.97 | ||
| Fwd PE | 26.23 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WM.
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 | 41.59 | ||
| EV/EBITDA | 16.46 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of WM may justify a higher PE ratio.
WM's earnings are expected to grow with 14.01% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.35
PEG (5Y)3.72
EPS Next 2Y15.85%
EPS Next 3Y14.01%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.36%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.09, WM pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.21, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
5.2 History
The dividend of WM is nicely growing with an annual growth rate of 8.45%!
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 Years20
Div Non Decr Years24
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 2Y15.85%
EPS Next 3Y14.01%
WASTE MANAGEMENT INC
NYSE:WM (11/15/2024, 8:04:00 PM)
After market: 217.9 0 (0%)217.9
-3.82 (-1.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap87.46B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.97 | ||
| Fwd PE | 26.23 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.35
PEG (5Y)3.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 33.1% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.83% | ||
| PM (TTM) | 12.35% | ||
| GM | 39.33% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)26.43%
EPS 3Y15.38%
EPS 5Y
EPS Q2Q%
EPS Next Y22.19%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.17%
Revenue growth 3Y10.31%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y