WASTE MANAGEMENT INC (WM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WM - US94106L1098 - Common Stock
219.66 USD
+3.32 (+1.53%)
219.74 USD
+0.08 (+0.04%)
We assign a fundamental rating of 4 out of 10 to WM. WM was compared to 80 industry peers in the Commercial Services & Supplies industry. WM has an excellent profitability rating, but there are concerns on its financial health. WM is valied quite expensively at the moment, while it does show a decent growth rate. WM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
WM had positive earnings in the past year.
WM had a positive operating cash flow in the past year.
WM had positive earnings in each of the past 5 years.
In the past 5 years WM always reported a positive cash flow from operatings.
1.2 Ratios
WM has a better Return On Assets (5.62%) than 75.00% of its industry peers.
WM has a better Return On Equity (26.94%) than 92.50% of its industry peers.
The Return On Invested Capital of WM (8.48%) is better than 72.50% 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 10.33%.
| 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
With an excellent Profit Margin value of 10.35%, WM belongs to the best of the industry, outperforming 86.25% of the companies in the same industry.
In the last couple of years the Profit Margin of WM has grown nicely.
WM's Operating Margin of 17.64% is amongst the best of the industry. WM outperforms 91.25% of its industry peers.
WM's Operating Margin has been stable in the last couple of years.
WM has a better Gross Margin (39.99%) than 66.25% of its industry peers.
WM's Gross Margin has been stable in the last couple of years.
| 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
WM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
WM has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, WM has less shares outstanding
Compared to 1 year ago, WM has a worse debt to assets ratio.
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.
WM has a Altman-Z score of 2.80. This is comparable to the rest of the industry: WM outperforms 60.00% of its industry peers.
The Debt to FCF ratio of WM is 9.73, which is on the high side as it means it would take WM, 9.73 years of fcf income to pay off all of its debts.
WM has a Debt to FCF ratio of 9.73. This is comparable to the rest of the industry: WM outperforms 58.75% 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.
WM has a worse Debt to Equity ratio (2.36) than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 9.73 | ||
| Altman-Z | 2.8 |
ROIC/WACC1.11
WACC7.63%
2.3 Liquidity
WM has a Current 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 has a worse Current ratio (0.84) than 77.50% of its industry peers.
A Quick Ratio of 0.80 indicates that WM may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, WM is doing worse than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
WM shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
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 15.88%.
The Revenue has been growing slightly by 7.38% on average over the past years.
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
WM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.90% yearly.
Based on estimates for the next years, WM will show a small growth in Revenue. The Revenue will grow by 7.38% on average per year.
EPS Next Y6.72%
EPS Next 2Y9.02%
EPS Next 3Y10.75%
EPS Next 5Y8.9%
Revenue Next Year15.17%
Revenue Next 2Y10.25%
Revenue Next 3Y8.69%
Revenue Next 5Y7.38%
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 30.21 indicates a quite expensive valuation of WM.
WM's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.61. WM is around the same levels.
Based on the Price/Forward Earnings ratio of 25.56, the valuation of WM can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WM indicates a somewhat cheap valuation: WM is cheaper than 61.25% of the companies listed in the same industry.
WM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.01.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.21 | ||
| Fwd PE | 25.56 |
4.2 Price Multiples
WM's Enterprise Value to EBITDA is on the same level as the industry average.
WM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.84 | ||
| EV/EBITDA | 15.5 |
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)4.49
PEG (5Y)2.94
EPS Next 2Y9.02%
EPS Next 3Y10.75%
5. Dividend
5.1 Amount
WM has a Yearly Dividend Yield of 1.65%.
Compared to an average industry Dividend Yield of 0.89, WM pays a better dividend. On top of this WM pays more dividend than 83.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, WM has a dividend comparable with the average S&P500 company.
| 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 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
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 2Y9.02%
EPS Next 3Y10.75%
219.66
+3.32 (+1.53%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners83.62%
Inst Owner Change-1.3%
Ins Owners0.18%
Ins Owner Change0.48%
Market Cap88.49B
Revenue(TTM)24.78B
Net Income(TTM)2.56B
Analysts81.05
Price Target249.68 (13.67%)
Short Float %1.34%
Short Ratio2.66
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)-2.1%
PT rev (3m)-4.33%
EPS NQ rev (1m)-0.26%
EPS NQ rev (3m)-1.24%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)-0.95%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.5%
Revenue NY rev (1m)1.35%
Revenue NY rev (3m)-0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.21 | ||
| Fwd PE | 25.56 | ||
| P/S | 3.57 | ||
| P/FCF | 36.84 | ||
| P/OCF | 15.11 | ||
| P/B | 9.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.5 |
EPS(TTM)7.27
EY3.31%
EPS(NY)8.59
Fwd EY3.91%
FCF(TTM)5.96
FCFY2.71%
OCF(TTM)14.54
OCFY6.62%
SpS61.52
BVpS23.63
TBVpS-20.47
PEG (NY)4.49
PEG (5Y)2.94
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
WACC7.63%
ROIC/WACC1.11
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 Y6.72%
EPS Next 2Y9.02%
EPS Next 3Y10.75%
EPS Next 5Y8.9%
Revenue 1Y (TTM)15.88%
Revenue growth 3Y7.16%
Revenue growth 5Y7.38%
Sales Q2Q%14.87%
Revenue Next Year15.17%
Revenue Next 2Y10.25%
Revenue Next 3Y8.69%
Revenue Next 5Y7.38%
EBIT growth 1Y3.11%
EBIT growth 3Y11.95%
EBIT growth 5Y8.54%
EBIT Next Year74.63%
EBIT Next 3Y26.68%
EBIT Next 5Y17.52%
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 6.72% 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 50.78%.