WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WM - US94106L1098 - Common Stock
216.62 USD
-0.18 (-0.08%)
216.62 USD
0 (0%)
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 belongs to the best of the industry regarding profitability, there are concerns on its financial health. WM is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
WM had a positive operating cash flow in the past year.
WM had positive earnings in each of the past 5 years.
WM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WM's Return On Assets of 5.62% is fine compared to the rest of the industry. WM outperforms 71.95% of its industry peers.
WM has a better Return On Equity (26.94%) than 92.68% of its industry peers.
With a decent Return On Invested Capital value of 8.48%, WM is doing good in the industry, outperforming 71.95% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WM is in line with the industry average of 10.48%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 26.94% | ||
| ROIC | 8.48% |
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 has a better Profit Margin (10.35%) than 84.15% of its industry peers.
In the last couple of years the Profit Margin of WM has grown nicely.
WM has a better Operating Margin (17.64%) than 91.46% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
WM's Gross Margin of 39.99% is fine compared to the rest of the industry. WM outperforms 68.29% 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 | 17.64% | ||
| PM (TTM) | 10.35% | ||
| GM | 39.99% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WM is still 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
An Altman-Z score of 2.80 indicates that WM is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of WM (2.80) is better than 60.98% of its industry peers.
WM has a debt to FCF ratio of 9.73. This is a negative value and a sign of low solvency as WM would need 9.73 years to pay back of all of its debts.
WM's Debt to FCF ratio of 9.73 is in line compared to the rest of the industry. WM outperforms 56.10% of its industry peers.
A Debt/Equity ratio of 2.36 is on the high side and indicates that WM has dependencies on debt financing.
The Debt to Equity ratio of WM (2.36) is worse than 81.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | 2.8 |
ROIC/WACC1.14
WACC7.46%
2.3 Liquidity
A Current Ratio of 0.84 indicates that WM may have some problems paying its short term obligations.
With a Current ratio value of 0.84, WM is not doing good in the industry: 79.27% of the companies in the same industry are doing better.
WM has a Quick Ratio of 0.84. 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 0.80 is on the low side compared to the rest of the industry. WM is outperformed by 76.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for WM have decreased by 0.00% in the last year.
The Earnings Per Share has been growing by 10.29% on average over the past years. This is quite good.
WM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.88%.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.38% yearly.
EPS 1Y (TTM)0%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%1.02%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
3.2 Future
Based on estimates for the next years, WM will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.27% on average per year.
The Revenue is expected to grow by 7.47% on average over the next years.
EPS Next Y6.86%
EPS Next 2Y9%
EPS Next 3Y10.64%
EPS Next 5Y9.27%
Revenue Next Year13.63%
Revenue Next 2Y9.4%
Revenue Next 3Y8.69%
Revenue Next 5Y7.47%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 29.80, the valuation of WM can be described as expensive.
WM's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 25.45. WM is around the same levels.
The Price/Forward Earnings ratio is 25.22, which means the current valuation is very expensive for WM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WM is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of WM to the average of the S&P500 Index (34.46), we can say WM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.8 | ||
| Fwd PE | 25.22 |
4.2 Price Multiples
WM's Enterprise Value to EBITDA ratio is in line with the industry average.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.33 | ||
| EV/EBITDA | 15.53 |
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)4.34
PEG (5Y)2.89
EPS Next 2Y9%
EPS Next 3Y10.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.65%, WM has a reasonable but not impressive dividend return.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.59. WM pays more dividend than 81.71% of the companies in the same industry.
WM's Dividend Yield is slightly below the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.65% |
5.2 History
On average, the dividend of WM grows each year by 7.85%, which is quite nice.
WM has paid a dividend for at least 10 years, which is 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)7.85%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
50.78% 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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP50.78%
EPS Next 2Y9%
EPS Next 3Y10.64%
216.62
-0.18 (-0.08%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.79%
Inst Owner Change-1.14%
Ins Owners0.18%
Ins Owner Change7.2%
Market Cap87.26B
Revenue(TTM)24.78B
Net Income(TTM)2.56B
Analysts78.82
Price Target255.02 (17.73%)
Short Float %1.06%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.65% |
Yearly Dividend3.01
Dividend Growth(5Y)7.85%
DP50.78%
Div Incr Years21
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.21%
Min EPS beat(2)-4.76%
Max EPS beat(2)-1.66%
EPS beat(4)1
Avg EPS beat(4)-3.52%
Min EPS beat(4)-7.87%
Max EPS beat(4)0.19%
EPS beat(8)4
Avg EPS beat(8)0.84%
EPS beat(12)4
Avg EPS beat(12)-0.96%
EPS beat(16)6
Avg EPS beat(16)-0.28%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-3.82%
Max Revenue beat(2)-1.83%
Revenue beat(4)0
Avg Revenue beat(4)-2.73%
Min Revenue beat(4)-4.46%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-2.73%
Revenue beat(12)0
Avg Revenue beat(12)-3.06%
Revenue beat(16)2
Avg Revenue beat(16)-2.4%
PT rev (1m)-2.46%
PT rev (3m)-1.89%
EPS NQ rev (1m)-1.04%
EPS NQ rev (3m)-1.26%
EPS NY rev (1m)-0.82%
EPS NY rev (3m)-1.66%
Revenue NQ rev (1m)-0.48%
Revenue NQ rev (3m)-0.92%
Revenue NY rev (1m)-1.77%
Revenue NY rev (3m)-2.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.8 | ||
| Fwd PE | 25.22 | ||
| P/S | 3.52 | ||
| P/FCF | 36.33 | ||
| P/OCF | 14.9 | ||
| P/B | 9.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.53 |
EPS(TTM)7.27
EY3.36%
EPS(NY)8.59
Fwd EY3.97%
FCF(TTM)5.96
FCFY2.75%
OCF(TTM)14.54
OCFY6.71%
SpS61.52
BVpS23.63
TBVpS-20.48
PEG (NY)4.34
PEG (5Y)2.89
Graham Number62.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 26.94% | ||
| ROCE | 10.97% | ||
| ROIC | 8.48% | ||
| ROICexc | 8.52% | ||
| ROICexgc | 15.42% | ||
| OM | 17.64% | ||
| PM (TTM) | 10.35% | ||
| GM | 39.99% | ||
| FCFM | 9.69% |
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 Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Debt/EBITDA | 3.16 | ||
| Cap/Depr | 125.83% | ||
| Cap/Sales | 13.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.28% | ||
| Profit Quality | 93.68% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 2.8 |
F-Score4
WACC7.46%
ROIC/WACC1.14
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)0%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%1.02%
EPS Next Y6.86%
EPS Next 2Y9%
EPS Next 3Y10.64%
EPS Next 5Y9.27%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
Revenue Next Year13.63%
Revenue Next 2Y9.4%
Revenue Next 3Y8.69%
Revenue Next 5Y7.47%
EBIT growth 1Y3.11%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.99%
EBIT Next 3Y27.21%
EBIT Next 5Y17.63%
FCF growth 1Y43.75%
FCF growth 3Y-3.92%
FCF growth 5Y0.98%
OCF growth 1Y33.52%
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 6.86% in the next year.
How sustainable is the dividend of WASTE MANAGEMENT INC (WM) stock?
The dividend rating of WASTE MANAGEMENT INC (WM) is 6 / 10 and the dividend payout ratio is 50.78%.