WASTE MANAGEMENT INC (WM)
US94106L1098 - Common Stock
Overall WM gets a fundamental rating of 5 out of 10. We evaluated WM against 85 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 quite expensive at the moment. It does show a decent 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.
In the past 5 years WM always reported a positive cash flow from operatings.
1.2 Ratios
WM has a better Return On Assets (7.59%) than 84.52% of its industry peers.
WM's Return On Equity of 35.00% is amongst the best of the industry. WM outperforms 96.43% of its industry peers.
WM's Return On Invested Capital of 10.63% is amongst the best of the industry. WM outperforms 83.33% 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 10.06%.
The 3 year average ROIC (9.61%) for WM is below the current ROIC(10.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 35% | ||
| ROIC | 10.63% |
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
Looking at the Profit Margin, with a value of 11.98%, WM belongs to the top of the industry, outperforming 89.29% of the companies in the same industry.
In the last couple of years the Profit Margin of WM has declined.
The Operating Margin of WM (19.39%) is better than 94.05% 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 38.82%, WM is in the better half of the industry, outperforming 70.24% 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 | 19.39% | ||
| PM (TTM) | 11.98% | ||
| GM | 38.82% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WM is creating some value.
WM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for WM has been reduced compared to 5 years ago.
The debt/assets ratio for WM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.63 indicates that WM is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.63, WM is doing good in the industry, outperforming 75.00% of the companies in the same industry.
WM has a debt to FCF ratio of 7.53. This is a slightly negative value and a sign of low solvency as WM would need 7.53 years to pay back of all of its debts.
WM's Debt to FCF ratio of 7.53 is in line compared to the rest of the industry. WM outperforms 57.14% of its industry peers.
WM has a Debt/Equity ratio of 2.23. This is a high value indicating a heavy dependency on external financing.
WM has a Debt to Equity ratio of 2.23. This is amonst the worse of the industry: WM underperforms 80.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.23 | ||
| Debt/FCF | 7.53 | ||
| Altman-Z | 3.63 |
ROIC/WACC1.34
WACC7.95%
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 has a worse Current ratio (0.89) than 80.95% of its industry peers.
A Quick Ratio of 0.85 indicates that WM may have some problems paying its short term obligations.
The Quick ratio of WM (0.85) is worse than 77.38% 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 18.18%, which is quite good.
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 3.83%.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.49% yearly.
EPS 1Y (TTM)18.18%
EPS 3Y15.38%
EPS 5Y8.07%
EPS growth Q2Q33.59%
Revenue 1Y (TTM)3.83%
Revenue growth 3Y10.31%
Revenue growth 5Y6.49%
Revenue growth Q2Q5.46%
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 11.59% on average per year.
WM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.50% yearly.
EPS Next Y15.4%
EPS Next 2Y14.09%
EPS Next 3Y13.58%
EPS Next 5Y11.59%
Revenue Next Year6.47%
Revenue Next 2Y6.46%
Revenue Next 3Y6.19%
Revenue Next 5Y6.5%
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 accelerating.
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
The Price/Earnings ratio is 31.74, which means the current valuation is very expensive for WM.
The rest of the industry has a similar Price/Earnings ratio as WM.
When comparing the Price/Earnings ratio of WM to the average of the S&P500 Index (28.60), we can say WM is valued inline with the index average.
A Price/Forward Earnings ratio of 26.12 indicates a quite expensive valuation of WM.
The rest of the industry has a similar Price/Forward Earnings ratio as WM.
WM's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 20.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.74 | ||
| Fwd PE | 26.12 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.46 | ||
| EV/EBITDA | 16.44 |
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.
WM has an outstanding profitability rating, which may justify a higher PE ratio.
WM's earnings are expected to grow with 13.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.06
PEG (5Y)3.94
EPS Next 2Y14.09%
EPS Next 3Y13.58%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.41%.
WM's Dividend Yield is a higher than the industry average which is at 2.32.
WM's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
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 Years19
Div Non Decr Years19
5.3 Sustainability
WM pays out 46.55% 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.
DP46.55%
EPS Next 2Y14.09%
EPS Next 3Y13.58%
WASTE MANAGEMENT INC
NYSE:WM (5/17/2024, 7:04:00 PM)
After market: 210.44 0 (0%)210.44
-1.76 (-0.83%)
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 Cap84.40B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
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)
Avg EPS beat(12)
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)
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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 | 31.74 | ||
| Fwd PE | 26.12 | ||
| 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)2.06
PEG (5Y)3.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 35% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.39% | ||
| PM (TTM) | 11.98% | ||
| GM | 38.82% | ||
| 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 Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.23 | ||
| 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)
Growth
EPS 1Y (TTM)18.18%
EPS 3Y15.38%
EPS 5Y
EPS growth Q2Q
EPS Next Y15.4%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.83%
Revenue growth 3Y10.31%
Revenue growth 5Y
Revenue growth 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