WASTE MANAGEMENT INC (WM)
US94106L1098 - Common Stock
WM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 83 industry peers in the Commercial Services & Supplies industry. WM has an excellent profitability rating, but there are concerns on its financial health. WM has a decent growth rate and is not valued too expensively. Finally 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.
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
The Return On Assets of WM (7.60%) is better than 75.90% of its industry peers.
WM has a better Return On Equity (33.10%) than 93.98% of its industry peers.
With an excellent Return On Invested Capital value of 10.77%, WM belongs to the best of the industry, outperforming 80.72% of the companies in the same industry.
WM had an Average Return On Invested Capital over the past 3 years of 9.61%. This is in line with the industry average of 10.04%.
The 3 year average ROIC (9.61%) for WM is below the current ROIC(10.77%), indicating increased profibility in the last year.
| 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 86.75% of its industry peers.
In the last couple of years the Profit Margin of WM has declined.
WM has a Operating Margin of 19.83%. This is amongst the best in the industry. WM outperforms 92.77% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 39.33%, WM is in the better half of the industry, outperforming 63.86% of the companies in the same industry.
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 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WM is still creating some value.
WM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, WM has less shares outstanding
The debt/assets ratio for WM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.48 indicates that WM is not in any danger for bankruptcy at the moment.
WM's Altman-Z score of 3.48 is fine compared to the rest of the industry. WM outperforms 69.88% 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's Debt to FCF ratio of 7.92 is fine compared to the rest of the industry. WM outperforms 60.24% of its industry peers.
A Debt/Equity ratio of 2.00 is on the high side and indicates that WM has dependencies on debt 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 83.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 7.92 | ||
| Altman-Z | 3.48 |
ROIC/WACC1.33
WACC8.11%
2.3 Liquidity
WM has a Current 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's Current ratio of 0.89 is on the low side compared to the rest of the industry. WM is outperformed by 83.13% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.85, WM is doing worse than 77.11% of the companies in the same industry.
| 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.
WM shows a small growth in Revenue. In the last year, the Revenue has grown by 6.17%.
The Revenue has been growing slightly by 6.49% on average over the past years.
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 12.29% 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 8.60% on average per year.
EPS Next Y21.91%
EPS Next 2Y15.97%
EPS Next 3Y14.13%
EPS Next 5Y12.29%
Revenue Next Year6.94%
Revenue Next 2Y9.19%
Revenue Next 3Y8.11%
Revenue Next 5Y8.6%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 28.20 indicates a quite expensive valuation of WM.
The rest of the industry has a similar Price/Earnings ratio as WM.
The average S&P500 Price/Earnings ratio is at 27.55. WM is around the same levels.
The Price/Forward Earnings ratio is 24.63, which indicates a rather expensive current valuation of WM.
62.65% of the companies in the same industry are more expensive than WM, based on the Price/Forward Earnings ratio.
WM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.00, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.2 | ||
| Fwd PE | 24.63 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WM.
The rest of the industry has a similar Price/Free Cash Flow ratio as WM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.13 | ||
| EV/EBITDA | 15.43 |
4.3 Compensation for Growth
WM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WM has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as WM's earnings are expected to grow with 14.13% in the coming years.
PEG (NY)1.29
PEG (5Y)3.5
EPS Next 2Y15.97%
EPS Next 3Y14.13%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.46%.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.11. WM pays more dividend than 80.72% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.46% |
5.2 History
On average, the dividend of WM grows each year by 8.45%, which is quite nice.
WM has paid a dividend for at least 10 years, which is a reliable track record.
WM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.45%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
45.06% of the earnings are spent on dividend by WM. 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 2Y15.97%
EPS Next 3Y14.13%
WASTE MANAGEMENT INC
NYSE:WM (12/26/2024, 8:04:00 PM)
After market: 205.02 0 (0%)205.02
-0.36 (-0.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.54%
Inst Owner Change-0.54%
Ins Owners0.17%
Ins Owner Change0.87%
Market Cap82.29B
Analysts77.5
Price Target237.16 (15.68%)
Short Float %0.64%
Short Ratio1.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.46% |
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)2.54%
PT rev (3m)2.95%
EPS NQ rev (1m)0.19%
EPS NQ rev (3m)-0.3%
EPS NY rev (1m)-0.22%
EPS NY rev (3m)0.62%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)2.35%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.2 | ||
| Fwd PE | 24.63 | ||
| P/S | 3.85 | ||
| P/FCF | 39.13 | ||
| P/OCF | 15.64 | ||
| P/B | 10.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.43 |
EPS(TTM)7.27
EY3.55%
EPS(NY)8.32
Fwd EY4.06%
FCF(TTM)5.24
FCFY2.56%
OCF(TTM)13.11
OCFY6.39%
SpS53.28
BVpS19.88
TBVpS-6.44
PEG (NY)1.29
PEG (5Y)3.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 33.1% | ||
| ROCE | 14.16% | ||
| ROIC | 10.77% | ||
| ROICexc | 10.99% | ||
| ROICexgc | 17.18% | ||
| OM | 19.83% | ||
| PM (TTM) | 12.35% | ||
| GM | 39.33% | ||
| FCFM | 9.83% |
ROA(3y)6.8%
ROA(5y)6.3%
ROE(3y)30.51%
ROE(5y)27.05%
ROIC(3y)9.61%
ROIC(5y)8.95%
ROICexc(3y)9.72%
ROICexc(5y)9.33%
ROICexgc(3y)15.63%
ROICexgc(5y)14.88%
ROCE(3y)12.63%
ROCE(5y)11.76%
ROICexcg growth 3Y8.56%
ROICexcg growth 5Y-0.35%
ROICexc growth 3Y10.97%
ROICexc growth 5Y-0.39%
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%
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 | 3.48 |
F-Score8
WACC8.11%
ROIC/WACC1.33
Cap/Depr(3y)120.66%
Cap/Depr(5y)115.03%
Cap/Sales(3y)12.64%
Cap/Sales(5y)12.08%
Profit Quality(3y)100.1%
Profit Quality(5y)108.36%
High Growth Momentum
Growth
EPS 1Y (TTM)26.43%
EPS 3Y15.38%
EPS 5Y8.07%
EPS Q2Q%20.25%
EPS Next Y21.91%
EPS Next 2Y15.97%
EPS Next 3Y14.13%
EPS Next 5Y12.29%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y10.31%
Revenue growth 5Y6.49%
Sales Q2Q%7.91%
Revenue Next Year6.94%
Revenue Next 2Y9.19%
Revenue Next 3Y8.11%
Revenue Next 5Y8.6%
EBIT growth 1Y17.75%
EBIT growth 3Y15.07%
EBIT growth 5Y6.93%
EBIT Next Year74.38%
EBIT Next 3Y28.15%
EBIT Next 5Y20.03%
FCF growth 1Y6.27%
FCF growth 3Y0.99%
FCF growth 5Y-0.56%
OCF growth 1Y17.49%
OCF growth 3Y11.51%
OCF growth 5Y5.74%