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. While WCN belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, WCN is valued expensive at the moment.
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.
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
WCN has a better Return On Assets (3.11%) than 70.83% of its industry peers.
Looking at the Return On Equity, with a value of 7.85%, WCN is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
With an excellent Return On Invested Capital value of 7.47%, WCN belongs to the best of the industry, outperforming 87.50% 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 7.91%.
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
WCN has a Profit Margin of 6.93%. This is in the better half 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 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.
WCN has a better Gross Margin (42.02%) than 70.83% of its industry peers.
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
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.
Compared to 5 years ago, WCN has less shares outstanding
Compared to 1 year ago, WCN has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.48 indicates that WCN is not in any danger for bankruptcy at the moment.
WCN has a Altman-Z score of 3.48. This is amongst the best in the industry. WCN outperforms 87.50% 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.
With a Debt to FCF ratio value of 7.11, WCN perfoms like the industry average, outperforming 54.17% of the companies in the same 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 | 3.48 |
ROIC/WACC0.9
WACC8.31%
2.3 Liquidity
A Current Ratio of 0.70 indicates that WCN may have some problems paying its short term obligations.
The Current ratio of WCN (0.70) is worse 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.
Looking at the Quick ratio, with a value of 0.70, WCN is doing worse than 70.83% of the companies in the same industry.
| 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.
WCN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.90% yearly.
The Revenue has grown by 10.75% in the past year. This is quite good.
WCN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.60% yearly.
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
The Earnings Per Share is expected to grow by 12.25% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.92% on average over the next years.
EPS Next Y11.3%
EPS Next 2Y12.86%
EPS Next 3Y13.78%
EPS Next 5Y12.25%
Revenue Next Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.92%
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.
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
Based on the Price/Earnings ratio of 39.76, the valuation of WCN can be described as expensive.
WCN's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of WCN to the average of the S&P500 Index (26.25), we can say WCN is valued expensively.
Based on the Price/Forward Earnings ratio of 31.82, the valuation of WCN can be described as expensive.
WCN's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of WCN to the average of the S&P500 Index (22.15), we can say WCN is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.76 | ||
| Fwd PE | 31.82 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WCN.
The rest of the industry has a similar Price/Free Cash Flow ratio as WCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.45 | ||
| EV/EBITDA | 19.95 |
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.
WCN's earnings are expected to grow with 13.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.52
PEG (5Y)3.34
EPS Next 2Y12.86%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.67%, which is pretty low.
WCN's Dividend Yield is a higher than the industry average which is at 2.37.
With a Dividend Yield of 0.67, WCN pays less dividend than the S&P500 average, which is at 2.40.
| 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 paid a dividend for at least 10 years, which is 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 (5/29/2025, 7:00:00 PM)
268.39
-2.07 (-0.77%)
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 Cap69.34B
Analysts75.29
Price Target284.99 (6.19%)
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)-1.64%
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)40.07%
PT rev (3m)41.9%
EPS NQ rev (1m)-5.92%
EPS NQ rev (3m)-4.47%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.49%
Revenue NQ rev (1m)-0.78%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)-0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.76 | ||
| Fwd PE | 31.82 | ||
| P/S | 5.53 | ||
| P/FCF | 42.45 | ||
| P/OCF | 22 | ||
| P/B | 6.26 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.95 |
EPS(TTM)6.75
EY2.51%
EPS(NY)8.43
Fwd EY3.14%
FCF(TTM)6.32
FCFY2.36%
OCF(TTM)12.2
OCFY4.55%
SpS48.56
BVpS42.88
TBVpS-11.28
PEG (NY)3.52
PEG (5Y)3.34
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 | 3.48 |
F-Score5
WACC8.31%
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)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 Year7.12%
Revenue Next 2Y7.11%
Revenue Next 3Y7.63%
Revenue Next 5Y7.92%
EBIT growth 1Y12.58%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year80.4%
EBIT Next 3Y29.5%
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%