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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WCN was profitable.
WCN had a positive operating cash flow in the past year.
Each year in the past 5 years WCN has been profitable.
In the past 5 years WCN always reported a positive cash flow from operatings.
1.2 Ratios
WCN has a better Return On Assets (3.11%) than 70.83% of its industry peers.
With a decent Return On Equity value of 7.85%, WCN is doing good in the industry, outperforming 66.67% of the companies in the same industry.
The Return On Invested Capital of WCN (7.47%) is better than 83.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WCN is in line with the industry average of 7.19%.
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
WCN's Profit Margin of 6.93% is fine compared to the rest of the industry. WCN outperforms 75.00% of its industry peers.
In the last couple of years the Profit Margin of WCN has declined.
WCN's Operating Margin of 19.16% is amongst the best of the industry. WCN outperforms 95.83% of its industry peers.
WCN's Operating Margin has improved in the last couple of years.
The Gross Margin of WCN (42.02%) is better 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 | 19.16% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WCN is destroying value.
WCN has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WCN has been reduced compared to 5 years ago.
The debt/assets ratio for WCN is higher compared to a year ago.
2.2 Solvency
WCN has an Altman-Z score of 3.36. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
WCN's Altman-Z score of 3.36 is amongst the best of the industry. WCN outperforms 83.33% of its industry peers.
The Debt to FCF ratio of WCN is 7.11, which is on the high side as it means it would take WCN, 7.11 years of fcf income to pay off all of its debts.
WCN has a Debt to FCF ratio (7.11) which is in line with its industry peers.
WCN has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
WCN has a Debt to Equity ratio (1.05) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 3.36 |
ROIC/WACC0.88
WACC8.47%
2.3 Liquidity
WCN has a Current 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.
WCN has a worse Current ratio (0.70) than 70.83% 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.
WCN has a Quick ratio of 0.70. This is in the lower half of the industry: WCN underperforms 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
WCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.44%, which is quite good.
The Earnings Per Share has been growing by 11.90% on average over the past years. This is quite good.
Looking at the last year, WCN shows a quite strong growth in Revenue. The Revenue has grown by 10.75% in the last year.
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
Based on estimates for the next years, WCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.10% on average per year.
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 Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.82%
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.
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
A Price/Earnings ratio of 37.89 indicates a quite expensive valuation of WCN.
WCN's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.51, WCN is valued a bit more expensive.
The Price/Forward Earnings ratio is 30.29, which means the current valuation is very expensive for WCN.
The rest of the industry has a similar Price/Forward Earnings ratio as WCN.
WCN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 35.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.89 | ||
| Fwd PE | 30.29 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as WCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.41 | ||
| EV/EBITDA | 19.13 |
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.
A more expensive valuation may be justified as WCN's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)3.35
PEG (5Y)3.18
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.73%, which is pretty low.
Compared to an average industry Dividend Yield of 2.24, WCN pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
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.
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
WCN pays out 49.31% of its income as dividend. 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 (7/14/2025, 7:00:00 PM)
252.71
+1.68 (+0.67%)
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 Cap65.29B
Analysts75.29
Price Target284.99 (12.77%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
Yearly Dividend1.61
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)-1.64%
Min EPS beat(2)-5.03%
Max EPS beat(2)1.76%
EPS beat(4)3
Avg EPS beat(4)1.02%
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)-0.5%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)-0.25%
Revenue beat(4)2
Avg Revenue beat(4)0.06%
Min Revenue beat(4)-0.75%
Max Revenue beat(4)0.84%
Revenue beat(8)2
Avg Revenue beat(8)-0.24%
Revenue beat(12)4
Avg Revenue beat(12)-0.23%
Revenue beat(16)8
Avg Revenue beat(16)0.15%
PT rev (1m)0%
PT rev (3m)40.07%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-6.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.89 | ||
| Fwd PE | 30.29 | ||
| P/S | 5.26 | ||
| P/FCF | 40.41 | ||
| P/OCF | 20.94 | ||
| P/B | 5.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.13 |
EPS(TTM)6.67
EY2.64%
EPS(NY)8.34
Fwd EY3.3%
FCF(TTM)6.25
FCFY2.47%
OCF(TTM)12.07
OCFY4.78%
SpS48.03
BVpS42.41
TBVpS-11.16
PEG (NY)3.35
PEG (5Y)3.18
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 | 3.36 |
F-Score5
WACC8.47%
ROIC/WACC0.88
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 5Y12.1%
Revenue 1Y (TTM)10.75%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.5%
Revenue Next Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.82%
EBIT growth 1Y12.58%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year80.4%
EBIT Next 3Y29.5%
EBIT Next 5Y20.06%
FCF growth 1Y8.63%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y12.66%
OCF growth 3Y9.49%
OCF growth 5Y7.67%