WASTE CONNECTIONS INC (WCN) Stock Fundamental Analysis
USA - NYSE:WCN - CA94106B1013 - Common Stock
173.46 USD
-0.69 (-0.4%)
173.46 USD
0 (0%)
Taking everything into account, WCN scores 5 out of 10 in our fundamental rating. WCN was compared to 84 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.
In the past year WCN had a positive cash flow from operations.
WCN had positive earnings in each of the past 5 years.
Each year in the past 5 years WCN had a positive operating cash flow.
1.2 Ratios
WCN has a better Return On Assets (3.11%) than 64.29% of its industry peers.
WCN has a better Return On Equity (7.71%) than 65.48% of its industry peers.
WCN has a Return On Invested Capital of 7.49%. This is in the better half of the industry: WCN outperforms 67.86% of its industry peers.
WCN had an Average Return On Invested Capital over the past 3 years of 7.10%. This is below the industry average of 10.21%.
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
WCN has a better Profit Margin (6.97%) than 77.38% of its industry peers.
WCN's Profit Margin has declined in the last couple of years.
WCN's Operating Margin of 19.12% is amongst the best of the industry. WCN outperforms 92.86% of its industry peers.
In the last couple of years the Operating Margin of WCN has grown nicely.
Looking at the Gross Margin, with a value of 42.03%, WCN is in the better half of the industry, outperforming 73.81% 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 | 19.12% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WCN is destroying value.
The number of shares outstanding for WCN remains at a similar level compared to 1 year ago.
WCN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, WCN has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.20 indicates that WCN is not in any danger for bankruptcy at the moment.
WCN's Altman-Z score of 3.20 is fine compared to the rest of the industry. WCN outperforms 64.29% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 7.32, WCN is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
A Debt/Equity ratio of 1.00 indicates that WCN is somewhat dependend on debt financing.
The Debt to Equity ratio of WCN (1.00) is worse than 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 7.32 | ||
| Altman-Z | 3.2 |
ROIC/WACC0.93
WACC8.02%
2.3 Liquidity
A Current Ratio of 0.67 indicates that WCN may have some problems paying its short term obligations.
The Current ratio of WCN (0.67) is worse than 86.90% of its industry peers.
WCN has a Quick 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.
WCN has a Quick ratio of 0.67. This is amonst the worse of the industry: WCN underperforms 83.33% of its industry peers.
| 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.
Looking at the last year, WCN shows a quite strong growth in Revenue. The Revenue has grown by 9.65% in the last year.
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)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 11.36% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.45% on average over the next years.
EPS Next Y7.69%
EPS Next 2Y10.63%
EPS Next 3Y11.52%
EPS Next 5Y11.36%
Revenue Next Year6.34%
Revenue Next 2Y6.64%
Revenue Next 3Y6.78%
Revenue Next 5Y7.45%
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
The Price/Earnings ratio is 35.18, which means the current valuation is very expensive for WCN.
WCN's Price/Earnings is on the same level as the industry average.
WCN is valuated rather expensively when we compare the Price/Earnings ratio to 27.76, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 29.59 indicates a quite expensive valuation of WCN.
The rest of the industry has a similar Price/Forward Earnings ratio as WCN.
The average S&P500 Price/Forward Earnings ratio is at 23.21. WCN is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.18 | ||
| Fwd PE | 29.59 |
4.2 Price Multiples
WCN's Enterprise Value to EBITDA ratio is in line with the industry average.
WCN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.11 | ||
| EV/EBITDA | 17.8 |
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.
PEG (NY)4.57
PEG (5Y)2.96
EPS Next 2Y10.63%
EPS Next 3Y11.52%
5. Dividend
5.1 Amount
WCN has a yearly dividend return of 0.75%, which is pretty low.
Compared to an average industry Dividend Yield of 2.34, WCN pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, WCN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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.
WCN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)12.03%
Div Incr Years3
Div Non Decr Years3
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, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP49.38%
EPS Next 2Y10.63%
EPS Next 3Y11.52%
173.46
-0.69 (-0.4%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners90.89%
Inst Owner Change0%
Ins Owners0.11%
Ins Owner Change-1.01%
Market Cap44.60B
Analysts82.22
Price Target203.61 (17.38%)
Short Float %0.74%
Short Ratio1.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend1.17
Dividend Growth(5Y)12.03%
DP49.38%
Div Incr Years3
Div Non Decr Years3
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)-1.05%
PT rev (3m)-2.11%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-5.96%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-3.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.51%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.18 | ||
| Fwd PE | 29.59 | ||
| P/S | 4.83 | ||
| P/FCF | 39.11 | ||
| P/OCF | 19.33 | ||
| P/B | 5.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.8 |
EPS(TTM)4.93
EY2.84%
EPS(NY)5.86
Fwd EY3.38%
FCF(TTM)4.44
FCFY2.56%
OCF(TTM)8.97
OCFY5.17%
SpS35.91
BVpS32.49
TBVpS-7.5
PEG (NY)4.57
PEG (5Y)2.96
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 | 3.2 |
F-Score5
WACC8.02%
ROIC/WACC0.93
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 Y7.69%
EPS Next 2Y10.63%
EPS Next 3Y11.52%
EPS Next 5Y11.36%
Revenue 1Y (TTM)9.65%
Revenue growth 3Y13.19%
Revenue growth 5Y10.6%
Sales Q2Q%7.07%
Revenue Next Year6.34%
Revenue Next 2Y6.64%
Revenue Next 3Y6.78%
Revenue Next 5Y7.45%
EBIT growth 1Y8.5%
EBIT growth 3Y16.36%
EBIT growth 5Y13.35%
EBIT Next Year78.14%
EBIT Next 3Y28.33%
EBIT Next 5Y19.99%
FCF growth 1Y0.91%
FCF growth 3Y7.13%
FCF growth 5Y6.05%
OCF growth 1Y11.69%
OCF growth 3Y9.49%
OCF growth 5Y7.67%