WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
NYSE:WM - New York Stock Exchange, Inc. - US94106L1098 - Common Stock - Currency: USD
Overall WM gets a fundamental rating of 5 out of 10. We evaluated WM against 83 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 is valied quite expensively at the moment, while it does show a decent growth rate. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
WM had a positive operating cash flow in the past year.
WM had positive earnings in 4 of the past 5 years.
Of the past 5 years WM 4 years had a positive operating cash flow.
1.2 Ratios
WM's Return On Assets of 7.60% is fine compared to the rest of the industry. WM outperforms 75.61% of its industry peers.
The Return On Equity of WM (33.10%) is better than 93.90% of its industry peers.
WM has a better Return On Invested Capital (10.77%) than 79.27% 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 10.08%.
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
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 declined.
Looking at the Operating Margin, with a value of 19.83%, WM belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
In the last couple of years the Operating Margin of WM has remained more or less at the same level.
WM has a Gross Margin of 39.33%. This is in the better half 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 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 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 3.51 indicates that WM is not in any danger for bankruptcy at the moment.
The Altman-Z score of WM (3.51) is better than 69.51% of its industry peers.
WM has a debt to FCF ratio of 7.92. This is a slightly negative value and a sign of low solvency as WM would need 7.92 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.92, WM is in line with its industry, outperforming 59.76% 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 82.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 7.92 | ||
| Altman-Z | 3.51 |
ROIC/WACC1.3
WACC8.31%
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: 82.93% of the companies in the same industry are doing better.
A Quick Ratio of 0.85 indicates that WM may have some problems paying its short term obligations.
WM has a Quick ratio of 0.85. This is in the lower half of the industry: WM underperforms 76.83% of its industry peers.
| 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.
The Earnings Per Share has been growing by 10.29% on average over the past years. This is quite good.
EPS 1Y (TTM)16.8%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-2.3%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
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 8.44% on average per year.
EPS Next Y14.14%
EPS Next 2Y12.53%
EPS Next 3Y13.32%
EPS Next 5Y10.53%
Revenue Next Year13%
Revenue Next 2Y9.37%
Revenue Next 3Y9.64%
Revenue Next 5Y8.44%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.12, the valuation of WM can be described as expensive.
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 28.28, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 26.39 indicates a quite expensive valuation of WM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WM is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 91.29. WM is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.12 | ||
| Fwd PE | 26.39 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WM is on the same level as its industry peers.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.56 | ||
| EV/EBITDA | 15.69 |
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.
A more expensive valuation may be justified as WM's earnings are expected to grow with 13.32% in the coming years.
PEG (NY)2.13
PEG (5Y)2.93
EPS Next 2Y12.53%
EPS Next 3Y13.32%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.40%.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.06. 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 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
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 2Y12.53%
EPS Next 3Y13.32%
WASTE MANAGEMENT INC
NYSE:WM (1/30/2025, 12:23:07 PM)
217.76
+8.21 (+3.92%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.54%
Inst Owner Change-0.67%
Ins Owners0.17%
Ins Owner Change0.86%
Market Cap87.40B
Analysts77.5
Price Target238.18 (9.38%)
Short Float %0.84%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
Yearly Dividend2.81
Dividend Growth(5Y)8.45%
DP45.06%
Div Incr Years21
Div Non Decr Years25
Ex-DateN/A
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)0.34%
PT rev (3m)3.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.3%
EPS NY rev (1m)0%
EPS NY rev (3m)0.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.35%
Revenue NY rev (1m)0.31%
Revenue NY rev (3m)1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.12 | ||
| Fwd PE | 26.39 | ||
| P/S | 4.09 | ||
| P/FCF | 41.56 | ||
| P/OCF | 16.61 | ||
| P/B | 10.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.69 |
EPS(TTM)7.23
EY3.32%
EPS(NY)8.25
Fwd EY3.79%
FCF(TTM)5.24
FCFY2.41%
OCF(TTM)13.11
OCFY6.02%
SpS53.28
BVpS19.88
TBVpS-6.44
PEG (NY)2.13
PEG (5Y)2.93
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 | 3.51 |
F-Score8
WACC8.31%
ROIC/WACC1.3
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)16.8%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-2.3%
EPS Next Y14.14%
EPS Next 2Y12.53%
EPS Next 3Y13.32%
EPS Next 5Y10.53%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%12.96%
Revenue Next Year13%
Revenue Next 2Y9.37%
Revenue Next 3Y9.64%
Revenue Next 5Y8.44%
EBIT growth 1Y17.75%
EBIT growth 3Y15.07%
EBIT growth 5Y6.93%
EBIT Next Year74.69%
EBIT Next 3Y28.6%
EBIT Next 5Y20.21%
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%