WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
NYSE:WM - New York Stock Exchange, Inc. - US94106L1098 - Common Stock - Currency: USD
Overall WM gets a fundamental rating of 5 out of 10. We evaluated WM against 83 industry peers in the Commercial Services & Supplies industry. WM has an excellent profitability rating, but 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.
Each year in the past 5 years WM has been profitable.
WM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WM's Return On Assets of 6.01% is fine compared to the rest of the industry. WM outperforms 71.08% of its industry peers.
With an excellent Return On Equity value of 30.92%, WM belongs to the best of the industry, outperforming 91.57% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.23%, WM is in the better half of the industry, outperforming 65.06% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WM is below the industry average of 11.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.01% | ||
| ROE | 30.92% | ||
| ROIC | 8.23% |
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 11.67% is amongst the best of the industry. WM outperforms 83.13% of its industry peers.
WM's Profit Margin has improved in the last couple of years.
The Operating Margin of WM (18.16%) is better than 86.75% of its industry peers.
In the last couple of years the Operating Margin of WM has remained more or less at the same level.
WM has a Gross Margin of 39.40%. This is in the better half of the industry: WM outperforms 67.47% of its industry peers.
In the last couple of years the Gross Margin of WM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.16% | ||
| PM (TTM) | 11.67% | ||
| GM | 39.4% |
OM growth 3Y4.47%
OM growth 5Y1.08%
PM growth 3Y7.11%
PM growth 5Y2.87%
GM growth 3Y1.13%
GM growth 5Y-3.63%
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.
The number of shares outstanding for WM remains at a similar level compared to 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 an Altman-Z score of 2.83. This is not the best score and indicates that WM is in the grey zone with still only limited risk for bankruptcy at the moment.
WM's Altman-Z score of 2.83 is in line compared to the rest of the industry. WM outperforms 57.83% of its industry peers.
The Debt to FCF ratio of WM is 12.98, which is on the high side as it means it would take WM, 12.98 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 12.98, WM is in line with its industry, outperforming 49.40% of the companies in the same industry.
A Debt/Equity ratio of 2.65 is on the high side and indicates that WM has dependencies on debt financing.
WM has a worse Debt to Equity ratio (2.65) than 80.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.65 | ||
| Debt/FCF | 12.98 | ||
| Altman-Z | 2.83 |
ROIC/WACC1.05
WACC7.8%
2.3 Liquidity
A Current Ratio of 0.83 indicates that WM may have some problems paying its short term obligations.
WM has a worse Current ratio (0.83) than 80.72% of its industry peers.
WM has a Quick Ratio of 0.83. 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 Quick ratio of 0.79. This is in the lower half of the industry: WM underperforms 78.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.84% over the past year.
WM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.29% yearly.
The Revenue has grown by 10.77% in the past year. This is quite good.
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)7.84%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-4.57%
Revenue 1Y (TTM)10.77%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%16.65%
3.2 Future
The Earnings Per Share is expected to grow by 8.88% on average over the next years. This is quite good.
WM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.69% yearly.
EPS Next Y8.67%
EPS Next 2Y11.04%
EPS Next 3Y12.05%
EPS Next 5Y8.88%
Revenue Next Year16.19%
Revenue Next 2Y10.85%
Revenue Next 3Y8.92%
Revenue Next 5Y7.69%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.89, WM can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of WM is on the same level as its industry peers.
WM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
WM is valuated quite expensively with a Price/Forward Earnings ratio of 25.58.
The rest of the industry has a similar Price/Forward Earnings ratio as WM.
WM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.89 | ||
| Fwd PE | 25.58 |
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 | 49.95 | ||
| EV/EBITDA | 17.43 |
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.
WM has a very decent profitability rating, which may justify a higher PE ratio.
WM's earnings are expected to grow with 12.05% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.68
PEG (5Y)3.1
EPS Next 2Y11.04%
EPS Next 3Y12.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.46%, 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 2.45. WM pays more dividend than 80.72% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.35, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.46% |
5.2 History
The dividend of WM is nicely growing with an annual growth rate of 7.84%!
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)7.84%
Div Incr Years21
Div Non Decr Years25
5.3 Sustainability
WM pays out 46.32% of its income as dividend. 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.
DP46.32%
EPS Next 2Y11.04%
EPS Next 3Y12.05%
NYSE:WM (7/14/2025, 1:19:10 PM)
228
+1.99 (+0.88%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.91%
Inst Owner Change0.04%
Ins Owners0.2%
Ins Owner Change2.73%
Market Cap91.75B
Analysts77.65
Price Target253.93 (11.37%)
Short Float %0.9%
Short Ratio2.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.46% |
Yearly Dividend3.01
Dividend Growth(5Y)7.84%
DP46.32%
Div Incr Years21
Div Non Decr Years25
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.84%
Min EPS beat(2)-7.87%
Max EPS beat(2)0.19%
EPS beat(4)2
Avg EPS beat(4)-2.5%
Min EPS beat(4)-7.87%
Max EPS beat(4)0.88%
EPS beat(8)4
Avg EPS beat(8)0.79%
EPS beat(12)5
Avg EPS beat(12)-0.43%
EPS beat(16)7
Avg EPS beat(16)-0.28%
Revenue beat(2)0
Avg Revenue beat(2)-2.63%
Min Revenue beat(2)-4.46%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-2.47%
Min Revenue beat(4)-4.46%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-3.19%
Revenue beat(12)1
Avg Revenue beat(12)-2.74%
Revenue beat(16)3
Avg Revenue beat(16)-1.92%
PT rev (1m)0.02%
PT rev (3m)4.38%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-0.4%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-0.89%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-0.3%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.89 | ||
| Fwd PE | 25.58 | ||
| P/S | 4 | ||
| P/FCF | 49.95 | ||
| P/OCF | 17.54 | ||
| P/B | 10.61 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.43 |
EPS(TTM)7.15
EY3.14%
EPS(NY)8.91
Fwd EY3.91%
FCF(TTM)4.57
FCFY2%
OCF(TTM)13
OCFY5.7%
SpS56.96
BVpS21.5
TBVpS-22.1
PEG (NY)3.68
PEG (5Y)3.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.01% | ||
| ROE | 30.92% | ||
| ROCE | 10.64% | ||
| ROIC | 8.23% | ||
| ROICexc | 8.27% | ||
| ROICexgc | 15.06% | ||
| OM | 18.16% | ||
| PM (TTM) | 11.67% | ||
| GM | 39.4% | ||
| FCFM | 8.01% |
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%
ROICexcg growth 3Y1.2%
ROICexcg 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 5Y-3.63%
F-Score4
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.65 | ||
| Debt/FCF | 12.98 | ||
| Debt/EBITDA | 3.48 | ||
| Cap/Depr | 140.89% | ||
| Cap/Sales | 14.81% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.6% | ||
| Profit Quality | 68.67% | ||
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 2.83 |
F-Score4
WACC7.8%
ROIC/WACC1.05
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)7.84%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%-4.57%
EPS Next Y8.67%
EPS Next 2Y11.04%
EPS Next 3Y12.05%
EPS Next 5Y8.88%
Revenue 1Y (TTM)10.77%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%16.65%
Revenue Next Year16.19%
Revenue Next 2Y10.85%
Revenue Next 3Y8.92%
Revenue Next 5Y7.69%
EBIT growth 1Y3.76%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.5%
EBIT Next 3Y25.82%
EBIT Next 5Y17.33%
FCF growth 1Y23.04%
FCF growth 3Y-3.92%
FCF growth 5Y0.98%
OCF growth 1Y21.03%
OCF growth 3Y7.51%
OCF growth 5Y6.83%