WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - NYSE:WM - US94106L1098 - Common Stock
218.69 USD
+1.53 (+0.7%)
218.9 USD
+0.21 (+0.1%)
Taking everything into account, WM scores 4 out of 10 in our fundamental rating. WM was compared to 84 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. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year WM was profitable.
In the past year WM had a positive cash flow from operations.
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
With a decent Return On Assets value of 5.95%, WM is doing good in the industry, outperforming 72.62% of the companies in the same industry.
Looking at the Return On Equity, with a value of 29.57%, WM belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
WM has a better Return On Invested Capital (8.37%) 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 10.60%.
| 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 has a Profit Margin of 11.36%. This is amongst the best in the industry. WM outperforms 83.33% 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 89.29% of the companies in the same industry.
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 39.72%. This is in the better half of the industry: WM outperforms 67.86% of its industry peers.
WM's Gross Margin has been stable in the last couple of years.
| 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
WM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WM has about the same amount of shares outstanding.
WM has less shares outstanding than it did 5 years ago.
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.
The Debt to FCF ratio of WM (11.10) is comparable to the rest of the industry.
WM has a Debt/Equity ratio of 2.51. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.51, WM is doing worse than 80.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.51 | ||
| Debt/FCF | 11.1 | ||
| Altman-Z | N/A |
ROIC/WACC1.07
WACC7.85%
2.3 Liquidity
A Current Ratio of 0.86 indicates that WM may have some problems paying its short term obligations.
WM has a Current ratio of 0.86. This is amonst the worse of the industry: WM underperforms 82.14% 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's Quick ratio of 0.86 is on the low side compared to the rest of the industry. WM is outperformed by 77.38% of its industry peers.
| 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.
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%.
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.
WM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.85% yearly.
EPS Next Y7.75%
EPS Next 2Y10.33%
EPS Next 3Y11.86%
EPS Next 5Y9.5%
Revenue Next Year15.69%
Revenue Next 2Y10.72%
Revenue Next 3Y9.03%
Revenue Next 5Y7.85%
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
A Price/Earnings ratio of 30.16 indicates a quite expensive valuation of WM.
Compared to the rest of the industry, the Price/Earnings ratio of WM is on the same level as its industry peers.
When comparing the Price/Earnings ratio of WM to the average of the S&P500 Index (27.54), we can say WM is valued inline with the index average.
The Price/Forward Earnings ratio is 24.85, which indicates a rather expensive current valuation of WM.
WM's Price/Forward Earnings ratio is in line with the industry average.
WM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.05.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.16 | ||
| Fwd PE | 24.85 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.73 | ||
| EV/EBITDA | 16.2 |
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 decent profitability rating of WM may justify a higher PE ratio.
PEG (NY)3.89
PEG (5Y)2.93
EPS Next 2Y10.33%
EPS Next 3Y11.86%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.47%.
WM's Dividend Yield is rather good when compared to the industry average which is at 2.35. WM pays more dividend than 82.14% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.41, WM is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
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
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%
218.69
+1.53 (+0.7%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.79%
Inst Owner Change0.34%
Ins Owners0.18%
Ins Owner Change2.7%
Market Cap88.09B
Analysts78.13
Price Target260.98 (19.34%)
Short Float %1.01%
Short Ratio2.47
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%
PT rev (3m)2.77%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-2.56%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-0.9%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-1.21%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.16 | ||
| Fwd PE | 24.85 | ||
| P/S | 3.68 | ||
| P/FCF | 40.73 | ||
| P/OCF | 15.67 | ||
| P/B | 9.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.2 |
EPS(TTM)7.25
EY3.32%
EPS(NY)8.8
Fwd EY4.02%
FCF(TTM)5.37
FCFY2.46%
OCF(TTM)13.96
OCFY6.38%
SpS59.45
BVpS22.84
TBVpS-21.47
PEG (NY)3.89
PEG (5Y)2.93
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
WACC7.85%
ROIC/WACC1.07
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 5Y9.5%
Revenue 1Y (TTM)14.18%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%19.03%
Revenue Next Year15.69%
Revenue Next 2Y10.72%
Revenue Next 3Y9.03%
Revenue Next 5Y7.85%
EBIT growth 1Y4.5%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.99%
EBIT Next 3Y27.21%
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%