WASTE MANAGEMENT INC (WM)
US94106L1098 - Common Stock
Taking everything into account, WM scores 5 out of 10 in our fundamental rating. WM was compared to 85 industry peers in the Commercial Services & Supplies industry. While WM has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, WM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
WM had a positive operating cash flow in the past year.
In the past 5 years WM has always been profitable.
WM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WM has a better Return On Assets (7.59%) than 85.54% of its industry peers.
The Return On Equity of WM (35.00%) is better than 96.39% of its industry peers.
With an excellent Return On Invested Capital value of 10.63%, WM belongs to the best of the industry, outperforming 83.13% of the companies in the same industry.
WM had an Average Return On Invested Capital over the past 3 years of 9.61%. This is in line with the industry average of 10.17%.
The 3 year average ROIC (9.61%) for WM is below the current ROIC(10.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 35% | ||
| ROIC | 10.63% |
ROA(3y)6.8%
ROA(5y)6.3%
ROE(3y)30.51%
ROE(5y)27.05%
ROIC(3y)9.61%
ROIC(5y)8.95%
1.3 Margins
Looking at the Profit Margin, with a value of 11.98%, WM belongs to the top of the industry, outperforming 89.16% of the companies in the same industry.
WM's Profit Margin has declined in the last couple of years.
WM's Operating Margin of 19.39% is amongst the best of the industry. WM outperforms 93.98% of its industry peers.
In the last couple of years the Operating Margin of WM has remained more or less at the same level.
Looking at the Gross Margin, with a value of 38.82%, WM is in the better half of the industry, outperforming 71.08% of the companies in the same industry.
In the last couple of years the Gross Margin of WM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.39% | ||
| PM (TTM) | 11.98% | ||
| GM | 38.82% |
OM growth 3Y4.32%
OM growth 5Y0.41%
PM growth 3Y4.69%
PM growth 5Y-2.66%
GM growth 3Y-6.85%
GM growth 5Y-3.77%
2. Health
2.1 Basic Checks
WM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
WM has less shares outstanding than it did 1 year ago.
WM has less shares outstanding than it did 5 years ago.
WM has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.63 indicates that WM is not in any danger for bankruptcy at the moment.
The Altman-Z score of WM (3.63) is better than 74.70% of its industry peers.
The Debt to FCF ratio of WM is 7.53, which is on the high side as it means it would take WM, 7.53 years of fcf income to pay off all of its debts.
WM has a Debt to FCF ratio of 7.53. This is comparable to the rest of the industry: WM outperforms 55.42% of its industry peers.
A Debt/Equity ratio of 2.23 is on the high side and indicates that WM has dependencies on debt financing.
WM has a Debt to Equity ratio of 2.23. This is amonst the worse of the industry: WM underperforms 80.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.23 | ||
| Debt/FCF | 7.53 | ||
| Altman-Z | 3.63 |
ROIC/WACC1.32
WACC8.04%
2.3 Liquidity
WM has a Current Ratio of 0.89. This is a bad value and indicates that WM is not financially healthy enough and could expect problems in meeting its short term obligations.
WM's Current ratio of 0.89 is on the low side compared to the rest of the industry. WM is outperformed by 80.72% of its industry peers.
WM has a Quick Ratio of 0.89. This is a bad value and indicates that WM is not financially healthy enough and could expect problems in meeting its short term obligations.
WM's Quick ratio of 0.85 is on the low side compared to the rest of the industry. WM is outperformed by 77.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.18% over the past year.
The Earnings Per Share has been growing by 8.07% on average over the past years. This is quite good.
WM shows a small growth in Revenue. In the last year, the Revenue has grown by 3.83%.
Measured over the past years, WM shows a small growth in Revenue. The Revenue has been growing by 6.49% on average per year.
EPS 1Y (TTM)18.18%
EPS 3Y15.38%
EPS 5Y8.07%
EPS growth Q2Q33.59%
Revenue 1Y (TTM)3.83%
Revenue growth 3Y10.31%
Revenue growth 5Y6.49%
Revenue growth Q2Q5.46%
3.2 Future
WM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.59% yearly.
The Revenue is expected to grow by 6.50% on average over the next years.
EPS Next Y15.4%
EPS Next 2Y14.09%
EPS Next 3Y13.58%
EPS Next 5Y11.59%
Revenue Next Year6.47%
Revenue Next 2Y6.46%
Revenue Next 3Y6.19%
Revenue Next 5Y6.5%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.75 indicates a quite expensive valuation of WM.
WM's Price/Earnings is on the same level as the industry average.
WM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.31.
A Price/Forward Earnings ratio of 26.12 indicates a quite expensive valuation of WM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WM is on the same level as its industry peers.
WM is valuated rather expensively when we compare the Price/Forward Earnings ratio to 20.48, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.75 | ||
| Fwd PE | 26.12 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WM is on the same level as its industry peers.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.47 | ||
| EV/EBITDA | 16.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of WM may justify a higher PE ratio.
A more expensive valuation may be justified as WM's earnings are expected to grow with 13.58% in the coming years.
PEG (NY)2.06
PEG (5Y)3.94
EPS Next 2Y14.09%
EPS Next 3Y13.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.45%, WM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.31, WM pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.39, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
5.2 History
The dividend of WM is nicely growing with an annual growth rate of 8.45%!
WM has been paying a dividend for at least 10 years, so it has a reliable track record.
WM has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.45%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
46.55% of the earnings are spent on dividend by WM. This is a bit on the high side, but may be sustainable.
The dividend of WM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP46.55%
EPS Next 2Y14.09%
EPS Next 3Y13.58%
WASTE MANAGEMENT INC
NYSE:WM (5/9/2024, 6:25:58 PM)
After market: 210.5 0 (0%)210.5
+0.5 (+0.24%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap84.43B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.75 | ||
| Fwd PE | 26.12 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.06
PEG (5Y)3.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 35% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.39% | ||
| PM (TTM) | 11.98% | ||
| GM | 38.82% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.23 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.18%
EPS 3Y15.38%
EPS 5Y
EPS growth Q2Q
EPS Next Y15.4%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.83%
Revenue growth 3Y10.31%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y