WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - NYSE:WM - US94106L1098 - Common Stock
214.66 USD
-1.45 (-0.67%)
215.2 USD
+0.54 (+0.25%)
Taking everything into account, WM scores 4 out of 10 in our fundamental rating. WM was compared to 82 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. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
WM had a positive operating cash flow in the past year.
Each year in the past 5 years WM has been profitable.
Each year in the past 5 years WM had a positive operating cash flow.
1.2 Ratios
The Return On Assets of WM (5.95%) is better than 73.17% of its industry peers.
Looking at the Return On Equity, with a value of 29.57%, WM belongs to the top of the industry, outperforming 91.46% of the companies in the same industry.
WM has a better Return On Invested Capital (8.37%) than 73.17% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WM is in line with the industry average of 10.38%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.95% | ||
| ROE | 29.57% | ||
| ROIC | 8.37% |
ROA(3y)6.77%
ROA(5y)6.33%
ROE(3y)33.11%
ROE(5y)28.98%
ROIC(3y)9.52%
ROIC(5y)9.04%
1.3 Margins
WM's Profit Margin of 11.36% is amongst the best of the industry. WM outperforms 85.37% of its industry peers.
WM's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 18.04%, WM belongs to the best of the industry, outperforming 91.46% of the companies in the same industry.
WM's Operating Margin has been stable in the last couple of years.
The Gross Margin of WM (39.72%) is better than 69.51% of its industry peers.
In the last couple of years the Gross Margin of WM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.04% | ||
| PM (TTM) | 11.36% | ||
| GM | 39.72% |
OM growth 3Y4.47%
OM growth 5Y1.08%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y0.4%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WM is creating some value.
WM has about the same amout of 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
WM has a debt to FCF ratio of 11.10. This is a negative value and a sign of low solvency as WM would need 11.10 years to pay back of all of its debts.
WM has a Debt to FCF ratio (11.10) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.51 is on the high side and indicates that WM has dependencies on debt financing.
The Debt to Equity ratio of WM (2.51) is worse than 81.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.51 | ||
| Debt/FCF | 11.1 | ||
| Altman-Z | N/A |
ROIC/WACC1.13
WACC7.41%
2.3 Liquidity
WM has a Current Ratio of 0.86. 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 0.86 is on the low side compared to the rest of the industry. WM is outperformed by 80.49% of its industry peers.
WM has a Quick Ratio of 0.86. 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 has a worse Quick ratio (0.86) than 74.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
WM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.47%.
Measured over the past years, WM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.29% on average per year.
WM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.18%.
Measured over the past years, WM shows a small growth in Revenue. The Revenue has been growing by 7.38% on average per year.
EPS 1Y (TTM)4.47%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%5.49%
Revenue 1Y (TTM)14.18%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%19.03%
3.2 Future
The Earnings Per Share is expected to grow by 9.66% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.73% on average over the next years.
EPS Next Y7.75%
EPS Next 2Y10.33%
EPS Next 3Y11.86%
EPS Next 5Y9.66%
Revenue Next Year15.67%
Revenue Next 2Y10.73%
Revenue Next 3Y9.04%
Revenue Next 5Y7.73%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 29.61, the valuation of WM can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as WM.
The average S&P500 Price/Earnings ratio is at 26.91. WM is around the same levels.
A Price/Forward Earnings ratio of 24.39 indicates a rather expensive valuation of WM.
Based on the Price/Forward Earnings ratio, WM is valued a bit cheaper than 60.98% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.92, WM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.61 | ||
| Fwd PE | 24.39 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WM.
WM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.98 | ||
| EV/EBITDA | 16.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of WM may justify a higher PE ratio.
PEG (NY)3.82
PEG (5Y)2.88
EPS Next 2Y10.33%
EPS Next 3Y11.86%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.55%. Purely for dividend investing, there may be better candidates out there.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.46. WM pays more dividend than 81.71% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.32, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
5.2 History
On average, the dividend of WM grows each year by 7.85%, which is quite nice.
WM has been paying a dividend for at least 10 years, so it has a reliable track record.
WM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.85%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
46.71% 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.
DP46.71%
EPS Next 2Y10.33%
EPS Next 3Y11.86%
214.66
-1.45 (-0.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.79%
Inst Owner Change0.88%
Ins Owners0.18%
Ins Owner Change2.7%
Market Cap86.47B
Revenue(TTM)23.95B
Net Income(TTM)2.72B
Analysts78.18
Price Target261.47 (21.81%)
Short Float %1.1%
Short Ratio2.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend3.01
Dividend Growth(5Y)7.85%
DP46.71%
Div Incr Years21
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.74%
Min EPS beat(2)-1.66%
Max EPS beat(2)0.19%
EPS beat(4)2
Avg EPS beat(4)-2.12%
Min EPS beat(4)-7.87%
Max EPS beat(4)0.88%
EPS beat(8)4
Avg EPS beat(8)1.19%
EPS beat(12)5
Avg EPS beat(12)-0.55%
EPS beat(16)6
Avg EPS beat(16)-0.63%
Revenue beat(2)0
Avg Revenue beat(2)-3.15%
Min Revenue beat(2)-4.46%
Max Revenue beat(2)-1.83%
Revenue beat(4)0
Avg Revenue beat(4)-2.09%
Min Revenue beat(4)-4.46%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-2.79%
Revenue beat(12)0
Avg Revenue beat(12)-2.95%
Revenue beat(16)2
Avg Revenue beat(16)-2.2%
PT rev (1m)0.19%
PT rev (3m)2.97%
EPS NQ rev (1m)-0.22%
EPS NQ rev (3m)-2.43%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.85%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)-1.12%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.61 | ||
| Fwd PE | 24.39 | ||
| P/S | 3.61 | ||
| P/FCF | 39.98 | ||
| P/OCF | 15.38 | ||
| P/B | 9.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.05 |
EPS(TTM)7.25
EY3.38%
EPS(NY)8.8
Fwd EY4.1%
FCF(TTM)5.37
FCFY2.5%
OCF(TTM)13.96
OCFY6.5%
SpS59.45
BVpS22.84
TBVpS-21.47
PEG (NY)3.82
PEG (5Y)2.88
Graham Number61.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.95% | ||
| ROE | 29.57% | ||
| ROCE | 10.83% | ||
| ROIC | 8.37% | ||
| ROICexc | 8.47% | ||
| ROICexgc | 15.46% | ||
| OM | 18.04% | ||
| PM (TTM) | 11.36% | ||
| GM | 39.72% | ||
| FCFM | 9.03% |
ROA(3y)6.77%
ROA(5y)6.33%
ROE(3y)33.11%
ROE(5y)28.98%
ROIC(3y)9.52%
ROIC(5y)9.04%
ROICexc(3y)9.65%
ROICexc(5y)9.16%
ROICexgc(3y)16.08%
ROICexgc(5y)15.26%
ROCE(3y)12.3%
ROCE(5y)11.69%
ROICexgc growth 3Y1.2%
ROICexgc growth 5Y0.78%
ROICexc growth 3Y-2.68%
ROICexc growth 5Y-3.51%
OM growth 3Y4.47%
OM growth 5Y1.08%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y0.4%
F-Score4
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.51 | ||
| Debt/FCF | 11.1 | ||
| Debt/EBITDA | 3.34 | ||
| Cap/Depr | 134.38% | ||
| Cap/Sales | 14.44% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.55% | ||
| Profit Quality | 79.49% | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | N/A |
F-Score4
WACC7.41%
ROIC/WACC1.13
Cap/Depr(3y)136.42%
Cap/Depr(5y)120.43%
Cap/Sales(3y)13.98%
Cap/Sales(5y)12.66%
Profit Quality(3y)81.63%
Profit Quality(5y)99.46%
High Growth Momentum
Growth
EPS 1Y (TTM)4.47%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%5.49%
EPS Next Y7.75%
EPS Next 2Y10.33%
EPS Next 3Y11.86%
EPS Next 5Y9.66%
Revenue 1Y (TTM)14.18%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%19.03%
Revenue Next Year15.67%
Revenue Next 2Y10.73%
Revenue Next 3Y9.04%
Revenue Next 5Y7.73%
EBIT growth 1Y4.5%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.99%
EBIT Next 3Y27.21%
EBIT Next 5Y17.93%
FCF growth 1Y43.63%
FCF growth 3Y-3.92%
FCF growth 5Y0.98%
OCF growth 1Y30.59%
OCF growth 3Y7.51%
OCF growth 5Y6.83%
WASTE MANAGEMENT INC / WM FAQ
What is the fundamental rating for WM stock?
ChartMill assigns a fundamental rating of 4 / 10 to WM.
Can you provide the valuation status for WASTE MANAGEMENT INC?
ChartMill assigns a valuation rating of 3 / 10 to WASTE MANAGEMENT INC (WM). This can be considered as Overvalued.
Can you provide the profitability details for WASTE MANAGEMENT INC?
WASTE MANAGEMENT INC (WM) has a profitability rating of 7 / 10.
What is the expected EPS growth for WASTE MANAGEMENT INC (WM) stock?
The Earnings per Share (EPS) of WASTE MANAGEMENT INC (WM) is expected to grow by 7.75% in the next year.
How sustainable is the dividend of WASTE MANAGEMENT INC (WM) stock?
The dividend rating of WASTE MANAGEMENT INC (WM) is 7 / 10 and the dividend payout ratio is 46.71%.