WASTE CONNECTIONS INC (WCN.CA) Stock Fundamental Analysis
TSX:WCN - Toronto Stock Exchange - CA94106B1013 - Common Stock - Currency: CAD
We assign a fundamental rating of 5 out of 10 to WCN. WCN was compared to 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
WCN had positive earnings in the past year.
In the past year WCN had a positive cash flow from operations.
In the past 5 years WCN has always been profitable.
In the past 5 years WCN always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.11%, WCN is doing good in the industry, outperforming 75.00% of the companies in the same industry.
With a decent Return On Equity value of 7.85%, WCN is doing good in the industry, outperforming 75.00% of the companies in the same industry.
WCN's Return On Invested Capital of 7.47% is amongst the best of the industry. WCN outperforms 87.50% 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 7.94%.
The last Return On Invested Capital (7.47%) 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 | 7.85% | ||
| ROIC | 7.47% |
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
The Profit Margin of WCN (6.93%) is better than 83.33% of its industry peers.
In the last couple of years the Profit Margin of WCN has declined.
WCN has a Operating Margin of 19.16%. This is amongst the best in the industry. WCN outperforms 95.83% of its industry peers.
WCN's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 42.02%, WCN is doing good in the industry, outperforming 70.83% of the companies in the same industry.
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 | 19.16% | ||
| PM (TTM) | 6.93% | ||
| GM | 42.02% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WCN is destroying value.
Compared to 1 year ago, WCN has about the same amount of shares outstanding.
WCN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WCN is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.50 indicates that WCN is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.50, WCN belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
WCN has a debt to FCF ratio of 7.11. This is a slightly negative value and a sign of low solvency as WCN would need 7.11 years to pay back of all of its debts.
WCN's Debt to FCF ratio of 7.11 is in line compared to the rest of the industry. WCN outperforms 54.17% of its industry peers.
A Debt/Equity ratio of 1.05 is on the high side and indicates that WCN has dependencies on debt financing.
With a Debt to Equity ratio value of 1.05, WCN perfoms like the industry average, outperforming 54.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 3.5 |
ROIC/WACC0.91
WACC8.17%
2.3 Liquidity
A Current Ratio of 0.70 indicates that WCN may have some problems paying its short term obligations.
WCN has a worse Current ratio (0.70) than 66.67% of its industry peers.
WCN has a Quick Ratio of 0.70. This is a bad value and indicates that WCN is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.70, WCN is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.44% over the past year.
Measured over the past years, WCN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.90% on average per year.
WCN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.75%.
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)12.44%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%8.65%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.5%
3.2 Future
WCN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.25% yearly.
WCN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.92% yearly.
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.25%
Revenue Next Year7%
Revenue Next 2Y6.99%
Revenue Next 3Y7.62%
Revenue Next 5Y7.92%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 40.15, the valuation of WCN can be described as expensive.
62.50% of the companies in the same industry are more expensive than WCN, based on the Price/Earnings ratio.
WCN is valuated expensively when we compare the Price/Earnings ratio to 24.12, which is the current average of the S&P500 Index.
WCN is valuated quite expensively with a Price/Forward Earnings ratio of 32.12.
WCN's Price/Forward Earnings ratio is in line with the industry average.
WCN's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.15 | ||
| Fwd PE | 32.12 |
4.2 Price Multiples
WCN's Enterprise Value to EBITDA ratio is in line with the industry average.
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 | 42.84 | ||
| EV/EBITDA | 20.11 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WCN does not grow enough to justify the current Price/Earnings ratio.
WCN has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as WCN's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)3.55
PEG (5Y)3.37
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
With a yearly dividend of 0.67%, WCN is not a good candidate for dividend investing.
WCN's Dividend Yield is a higher than the industry average which is at 2.41.
With a Dividend Yield of 0.67, WCN pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
5.2 History
The dividend of WCN is nicely growing with an annual growth rate of 12.03%!
WCN has been paying a dividend for at least 10 years, so it has a reliable track record.
As WCN did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)12.03%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
49.31% 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.
DP49.31%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
TSX:WCN (5/8/2025, 7:00:00 PM)
272.23
-2.09 (-0.76%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners89.98%
Inst Owner ChangeN/A
Ins Owners0.14%
Ins Owner ChangeN/A
Market Cap70.32B
Analysts75.29
Price Target203.47 (-25.26%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
Yearly Dividend1.62
Dividend Growth(5Y)12.03%
DP49.31%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.63%
Min EPS beat(2)-5.03%
Max EPS beat(2)1.77%
EPS beat(4)3
Avg EPS beat(4)1.03%
Min EPS beat(4)-5.03%
Max EPS beat(4)4.9%
EPS beat(8)6
Avg EPS beat(8)1.14%
EPS beat(12)9
Avg EPS beat(12)1.6%
EPS beat(16)12
Avg EPS beat(16)1.57%
Revenue beat(2)0
Avg Revenue beat(2)-0.52%
Min Revenue beat(2)-0.79%
Max Revenue beat(2)-0.25%
Revenue beat(4)2
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-0.79%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.25%
Revenue beat(12)4
Avg Revenue beat(12)-0.23%
Revenue beat(16)8
Avg Revenue beat(16)0.15%
PT rev (1m)-0.89%
PT rev (3m)2.81%
EPS NQ rev (1m)-5.02%
EPS NQ rev (3m)-5.41%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)-2.28%
Revenue NQ rev (1m)-0.53%
Revenue NQ rev (3m)-0.57%
Revenue NY rev (1m)-0.19%
Revenue NY rev (3m)-0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.15 | ||
| Fwd PE | 32.12 | ||
| P/S | 5.58 | ||
| P/FCF | 42.84 | ||
| P/OCF | 22.2 | ||
| P/B | 6.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.11 |
EPS(TTM)6.78
EY2.49%
EPS(NY)8.48
Fwd EY3.11%
FCF(TTM)6.35
FCFY2.33%
OCF(TTM)12.26
OCFY4.5%
SpS48.81
BVpS43.1
TBVpS-11.34
PEG (NY)3.55
PEG (5Y)3.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 7.85% | ||
| ROCE | 9.43% | ||
| ROIC | 7.47% | ||
| ROICexc | 7.52% | ||
| ROICexgc | 16.81% | ||
| OM | 19.16% | ||
| PM (TTM) | 6.93% | ||
| GM | 42.02% | ||
| FCFM | 13.02% |
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 | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Debt/EBITDA | 2.86 | ||
| Cap/Depr | 92.25% | ||
| Cap/Sales | 12.1% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.85% | ||
| Profit Quality | 187.86% | ||
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 3.5 |
F-Score5
WACC8.17%
ROIC/WACC0.91
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)12.44%
EPS 3Y14.04%
EPS 5Y11.9%
EPS Q2Q%8.65%
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.25%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.5%
Revenue Next Year7%
Revenue Next 2Y6.99%
Revenue Next 3Y7.62%
Revenue Next 5Y7.92%
EBIT growth 1Y12.58%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year81.58%
EBIT Next 3Y29.51%
EBIT Next 5Y20.05%
FCF growth 1Y8.63%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y12.66%
OCF growth 3Y9.49%
OCF growth 5Y7.67%