WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
NYSE:WM - US94106L1098 - Common Stock
220.06 USD
-4.89 (-2.17%)
220.11 USD
+0.05 (+0.02%)
WM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 84 industry peers in the Commercial Services & Supplies industry. WM scores excellent on profitability, but there are 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.
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
The Return On Assets of WM (5.95%) is better than 72.62% of its industry peers.
With an excellent Return On Equity value of 29.57%, WM belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
The Return On Invested Capital of WM (8.37%) is better than 70.24% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WM is in line with the industry average of 10.65%.
| 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
The Profit Margin of WM (11.36%) is better than 83.33% of its industry peers.
WM's Profit Margin has improved in the last couple of years.
The Operating Margin of WM (18.04%) is better than 89.29% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
The Gross Margin of WM (39.72%) is better than 67.86% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so WM is still creating some value.
The number of shares outstanding for WM remains at a similar level compared to 1 year ago.
Compared to 5 years ago, WM has less shares outstanding
WM has a worse debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of WM is 11.10, which is on the high side as it means it would take WM, 11.10 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 11.10, WM is in line with its industry, outperforming 54.76% of the companies in the same industry.
A Debt/Equity ratio of 2.51 is on the high side and indicates that WM has dependencies on debt financing.
WM has a worse Debt to Equity ratio (2.51) than 80.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.51 | ||
| Debt/FCF | 11.1 | ||
| Altman-Z | N/A |
ROIC/WACC1.05
WACC7.98%
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.
Looking at the Current ratio, with a value of 0.86, WM is doing worse than 82.14% of the companies in the same industry.
A Quick Ratio of 0.86 indicates that WM may have some problems paying its short term obligations.
With a Quick ratio value of 0.86, WM is not doing good in the industry: 76.19% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.47% over the past year.
The Earnings Per Share has been growing by 10.29% on average over the past years. This is quite good.
Looking at the last year, WM shows a quite strong growth in Revenue. The Revenue has grown by 14.18% in the last year.
WM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.38% yearly.
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 9.50% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.85% on average over the next years.
EPS Next Y7.73%
EPS Next 2Y10.19%
EPS Next 3Y11.71%
EPS Next 5Y9.5%
Revenue Next Year15.62%
Revenue Next 2Y10.67%
Revenue Next 3Y9.03%
Revenue Next 5Y7.85%
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
A Price/Earnings ratio of 30.35 indicates a quite expensive valuation of WM.
The rest of the industry has a similar Price/Earnings ratio as WM.
The average S&P500 Price/Earnings ratio is at 27.06. WM is around the same levels.
The Price/Forward Earnings ratio is 25.07, which means the current valuation is very expensive for WM.
63.10% of the companies in the same industry are more expensive than WM, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of WM to the average of the S&P500 Index (22.69), we can say WM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.35 | ||
| Fwd PE | 25.07 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as WM.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.98 | ||
| EV/EBITDA | 16.28 |
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.
PEG (NY)3.92
PEG (5Y)2.95
EPS Next 2Y10.19%
EPS Next 3Y11.71%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.47%.
Compared to an average industry Dividend Yield of 2.26, WM pays a better dividend. On top of this WM pays more dividend than 83.33% of the companies listed in the same industry.
With a Dividend Yield of 1.47, WM pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
5.2 History
The dividend of WM is nicely growing with an annual growth rate of 7.85%!
WM has paid a dividend for at least 10 years, which is 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 2Y10.19%
EPS Next 3Y11.71%
220.06
-4.89 (-2.17%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.49%
Inst Owner Change0.34%
Ins Owners0.2%
Ins Owner Change2.7%
Market Cap88.65B
Analysts78.13
Price Target260.98 (18.59%)
Short Float %0.95%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
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)0.4%
PT rev (3m)3.38%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)-1.57%
EPS NY rev (1m)-0.86%
EPS NY rev (3m)-0.87%
Revenue NQ rev (1m)-0.13%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.4%
Revenue NY rev (3m)-0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.35 | ||
| Fwd PE | 25.07 | ||
| P/S | 3.7 | ||
| P/FCF | 40.98 | ||
| P/OCF | 15.77 | ||
| P/B | 9.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.28 |
EPS(TTM)7.25
EY3.29%
EPS(NY)8.78
Fwd EY3.99%
FCF(TTM)5.37
FCFY2.44%
OCF(TTM)13.96
OCFY6.34%
SpS59.45
BVpS22.84
TBVpS-21.47
PEG (NY)3.92
PEG (5Y)2.95
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%
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 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
WACC7.98%
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)4.47%
EPS 3Y14.23%
EPS 5Y10.29%
EPS Q2Q%5.49%
EPS Next Y7.73%
EPS Next 2Y10.19%
EPS Next 3Y11.71%
EPS Next 5Y9.5%
Revenue 1Y (TTM)14.18%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%19.03%
Revenue Next Year15.62%
Revenue Next 2Y10.67%
Revenue Next 3Y9.03%
Revenue Next 5Y7.85%
EBIT growth 1Y4.5%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year75.08%
EBIT Next 3Y27.2%
EBIT Next 5Y17.76%
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%