WASTE CONNECTIONS INC (WCN.CA) Stock Fundamental Analysis
TSX:WCN - Toronto Stock Exchange - CA94106B1013 - Common Stock - Currency: CAD
WCN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 24 industry peers in the Commercial Services & Supplies industry. WCN has an excellent profitability rating, but there are concerns on its financial health. WCN is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WCN was profitable.
In the past year WCN had a positive cash flow from operations.
Each year in the past 5 years WCN has been profitable.
WCN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WCN's Return On Assets of 3.11% is fine compared to the rest of the industry. WCN outperforms 70.83% of its industry peers.
The Return On Equity of WCN (7.71%) is better than 66.67% of its industry peers.
WCN's Return On Invested Capital of 7.49% is amongst the best of the industry. WCN outperforms 83.33% of its industry peers.
WCN had an Average Return On Invested Capital over the past 3 years of 7.10%. This is in line with the industry average of 7.19%.
The last Return On Invested Capital (7.49%) for WCN is above the 3 year average (7.10%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 7.71% | ||
| ROIC | 7.49% |
ROA(3y)4.08%
ROA(5y)3.58%
ROE(3y)9.84%
ROE(5y)8.27%
ROIC(3y)7.1%
ROIC(5y)6.62%
1.3 Margins
Looking at the Profit Margin, with a value of 6.97%, WCN is in the better half of the industry, outperforming 79.17% of the companies in the same industry.
In the last couple of years the Profit Margin of WCN has declined.
With an excellent Operating Margin value of 19.12%, WCN belongs to the best of the industry, outperforming 95.83% of the companies in the same industry.
WCN's Operating Margin has improved in the last couple of years.
WCN has a better Gross Margin (42.03%) than 75.00% of its industry peers.
In the last couple of years the Gross Margin of WCN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.12% | ||
| PM (TTM) | 6.97% | ||
| GM | 42.03% |
OM growth 3Y2.81%
OM growth 5Y2.48%
PM growth 3Y-11.67%
PM growth 5Y-8.02%
GM growth 3Y0.97%
GM growth 5Y0.56%
2. Health
2.1 Basic Checks
WCN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, WCN has about the same amount of shares outstanding.
The number of shares outstanding for WCN has been reduced compared to 5 years ago.
WCN has a worse debt/assets ratio than last year.
2.2 Solvency
WCN has an Altman-Z score of 3.37. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.37, WCN belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
The Debt to FCF ratio of WCN is 7.32, which is on the high side as it means it would take WCN, 7.32 years of fcf income to pay off all of its debts.
WCN's Debt to FCF ratio of 7.32 is in line compared to the rest of the industry. WCN outperforms 58.33% of its industry peers.
WCN has a Debt/Equity ratio of 1.00. This is a neutral value indicating WCN is somewhat dependend on debt financing.
The Debt to Equity ratio of WCN (1.00) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 7.32 | ||
| Altman-Z | 3.37 |
ROIC/WACC0.9
WACC8.3%
2.3 Liquidity
WCN has a Current Ratio of 0.67. This is a bad value and indicates that WCN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.67, WCN is not doing good in the industry: 70.83% of the companies in the same industry are doing better.
A Quick Ratio of 0.67 indicates that WCN may have some problems paying its short term obligations.
With a Quick ratio value of 0.67, WCN is not doing good in the industry: 70.83% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
WCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.11%, which is quite good.
The Earnings Per Share has been growing by 11.90% on average over the past years. This is quite good.
The Revenue has grown by 9.65% in the past year. This is quite good.
Measured over the past years, WCN shows a quite strong growth in Revenue. The Revenue has been growing by 10.60% on average per year.
EPS 1Y (TTM)8.11%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%4.03%
Revenue 1Y (TTM)9.65%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.07%
3.2 Future
The Earnings Per Share is expected to grow by 12.10% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.82% on average over the next years.
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.1%
Revenue Next Year6.45%
Revenue Next 2Y6.75%
Revenue Next 3Y6.92%
Revenue Next 5Y7.82%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 38.15 indicates a quite expensive valuation of WCN.
The rest of the industry has a similar Price/Earnings ratio as WCN.
Compared to an average S&P500 Price/Earnings ratio of 26.48, WCN is valued a bit more expensive.
The Price/Forward Earnings ratio is 30.84, which means the current valuation is very expensive for WCN.
62.50% of the companies in the same industry are cheaper than WCN, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.04, WCN is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.15 | ||
| Fwd PE | 30.84 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WCN is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WCN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.49 | ||
| EV/EBITDA | 19.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
WCN has a very decent profitability rating, which may justify a higher PE ratio.
WCN's earnings are expected to grow with 13.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.38
PEG (5Y)3.21
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
With a yearly dividend of 0.70%, WCN is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.32, WCN pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.70, WCN pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
On average, the dividend of WCN grows each year by 12.03%, which is quite nice.
WCN has paid a dividend for at least 10 years, which is a reliable track record.
WCN has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)12.03%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
49.38% of the earnings are spent on dividend by WCN. This is a bit on the high side, but may be sustainable.
The dividend of WCN is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP49.38%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
TSX:WCN (8/8/2025, 7:00:00 PM)
258.63
+0.18 (+0.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.49%
Inst Owner ChangeN/A
Ins Owners0.15%
Ins Owner ChangeN/A
Market Cap66.59B
Analysts75.29
Price Target286.24 (10.68%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
Yearly Dividend1.63
Dividend Growth(5Y)12.03%
DP49.38%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.89%
Min EPS beat(2)1.76%
Max EPS beat(2)2.03%
EPS beat(4)3
Avg EPS beat(4)0.3%
Min EPS beat(4)-5.03%
Max EPS beat(4)2.46%
EPS beat(8)7
Avg EPS beat(8)1.43%
EPS beat(12)9
Avg EPS beat(12)1.43%
EPS beat(16)12
Avg EPS beat(16)1.43%
Revenue beat(2)0
Avg Revenue beat(2)-0.6%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.45%
Revenue beat(4)1
Avg Revenue beat(4)-0.15%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.22%
Revenue beat(12)3
Avg Revenue beat(12)-0.28%
Revenue beat(16)7
Avg Revenue beat(16)0.03%
PT rev (1m)0.44%
PT rev (3m)40.68%
EPS NQ rev (1m)-5.88%
EPS NQ rev (3m)-5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-1.51%
Revenue NQ rev (3m)-1.94%
Revenue NY rev (1m)-0.62%
Revenue NY rev (3m)-0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.15 | ||
| Fwd PE | 30.84 | ||
| P/S | 5.25 | ||
| P/FCF | 42.49 | ||
| P/OCF | 21 | ||
| P/B | 5.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.02 |
EPS(TTM)6.78
EY2.62%
EPS(NY)8.39
Fwd EY3.24%
FCF(TTM)6.09
FCFY2.35%
OCF(TTM)12.31
OCFY4.76%
SpS49.29
BVpS44.59
TBVpS-10.3
PEG (NY)3.38
PEG (5Y)3.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 7.71% | ||
| ROCE | 9.45% | ||
| ROIC | 7.49% | ||
| ROICexc | 7.53% | ||
| ROICexgc | 16.88% | ||
| OM | 19.12% | ||
| PM (TTM) | 6.97% | ||
| GM | 42.03% | ||
| FCFM | 12.35% |
ROA(3y)4.08%
ROA(5y)3.58%
ROE(3y)9.84%
ROE(5y)8.27%
ROIC(3y)7.1%
ROIC(5y)6.62%
ROICexc(3y)7.13%
ROICexc(5y)6.71%
ROICexgc(3y)16.04%
ROICexgc(5y)15.16%
ROCE(3y)8.97%
ROCE(5y)8.36%
ROICexcg growth 3Y4.71%
ROICexcg growth 5Y6.27%
ROICexc growth 3Y5.49%
ROICexc growth 5Y5.39%
OM growth 3Y2.81%
OM growth 5Y2.48%
PM growth 3Y-11.67%
PM growth 5Y-8.02%
GM growth 3Y0.97%
GM growth 5Y0.56%
F-Score5
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 7.32 | ||
| Debt/EBITDA | 2.8 | ||
| Cap/Depr | 96.17% | ||
| Cap/Sales | 12.63% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.45% | ||
| Profit Quality | 177.13% | ||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z | 3.37 |
F-Score5
WACC8.3%
ROIC/WACC0.9
Cap/Depr(3y)94.39%
Cap/Depr(5y)92.61%
Cap/Sales(3y)12.05%
Cap/Sales(5y)12.09%
Profit Quality(3y)159.7%
Profit Quality(5y)199.37%
High Growth Momentum
Growth
EPS 1Y (TTM)8.11%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%4.03%
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.1%
Revenue 1Y (TTM)9.65%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.07%
Revenue Next Year6.45%
Revenue Next 2Y6.75%
Revenue Next 3Y6.92%
Revenue Next 5Y7.82%
EBIT growth 1Y8.5%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year80.4%
EBIT Next 3Y29.5%
EBIT Next 5Y20.06%
FCF growth 1Y0.91%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y11.69%
OCF growth 3Y9.49%
OCF growth 5Y7.67%