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 scores excellent on profitability, 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.
WCN had a positive operating cash flow in the past year.
WCN had positive earnings in each of the past 5 years.
In the past 5 years WCN always reported a positive cash flow from operatings.
1.2 Ratios
WCN has a Return On Assets of 3.11%. This is in the better half of the industry: WCN outperforms 70.83% of its industry peers.
WCN has a Return On Equity of 7.85%. This is in the better half of the industry: WCN outperforms 66.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.47%, WCN belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WCN is in line with the industry average of 7.19%.
The 3 year average ROIC (7.10%) for WCN is below the current ROIC(7.47%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 6.93%, WCN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
WCN's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.16%, WCN belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
In the last couple of years the Operating Margin of WCN has grown nicely.
Looking at the Gross Margin, with a value of 42.02%, WCN is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
WCN's Gross Margin has been stable in the last couple of years.
| 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.
The number of shares outstanding for WCN remains at a similar level compared to 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 3.34. This indicates that WCN is financially healthy and has little risk of bankruptcy at the moment.
WCN has a Altman-Z score of 3.34. This is amongst the best in 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.
The Debt to FCF ratio of WCN (7.11) is comparable to the rest of the industry.
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 of 1.05. This is comparable to the rest of the industry: WCN outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 3.34 |
ROIC/WACC0.88
WACC8.47%
2.3 Liquidity
A Current Ratio of 0.70 indicates that WCN may have some problems paying its short term obligations.
WCN's Current ratio of 0.70 is on the low side compared to the rest of the industry. WCN is outperformed by 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 worse Quick ratio (0.70) than 70.83% of its industry peers.
| 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.
Looking at the last year, WCN shows a quite strong growth in Revenue. The Revenue has grown by 10.75% in the last year.
The Revenue has been growing by 10.60% on average over the past years. This is quite good.
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 12.10% yearly.
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
Based on the Price/Earnings ratio of 37.52, the valuation of WCN can be described as expensive.
WCN's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.41, WCN is valued a bit more expensive.
With a Price/Forward Earnings ratio of 30.03, WCN can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as WCN.
The average S&P500 Price/Forward Earnings ratio is at 35.19. WCN is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.52 | ||
| Fwd PE | 30.03 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WCN.
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 | 40.06 | ||
| EV/EBITDA | 18.99 |
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.
The decent profitability rating of WCN 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)3.32
PEG (5Y)3.15
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.
WCN's Dividend Yield is a higher than the industry average which is at 2.24.
With a Dividend Yield of 0.73, WCN pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
On average, the dividend of WCN grows each year by 12.03%, which is quite nice.
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.
WCN's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP49.31%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
TSX:WCN (7/11/2025, 7:00:00 PM)
251.03
+2.23 (+0.9%)
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 Cap64.86B
Analysts75.29
Price Target284.99 (13.53%)
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 | 37.52 | ||
| Fwd PE | 30.03 | ||
| P/S | 5.22 | ||
| P/FCF | 40.06 | ||
| P/OCF | 20.76 | ||
| P/B | 5.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.99 |
EPS(TTM)6.69
EY2.67%
EPS(NY)8.36
Fwd EY3.33%
FCF(TTM)6.27
FCFY2.5%
OCF(TTM)12.09
OCFY4.82%
SpS48.13
BVpS42.5
TBVpS-11.18
PEG (NY)3.32
PEG (5Y)3.15
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 | 3.34 |
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%