Now trading at a price of $204.08, Waste Management has moved -2.0% so far today.
Waste Management returned gains of 30.5% last year, with its stock price reaching a high of $225.0 and a low of $149.71. Over the same period, the stock outperformed the S&P 500 index by 3.7%. More recently, the company's 50-day average price was $209.16. Waste Management, Inc., through its subsidiaries, engages in the provision of environmental solutions to residential, commercial, industrial, and municipal customers in the United States and Canada. Based in Houston, TX, the Large-Cap Utilities company has 48,000 full time employees. Waste Management has offered a 1.4% dividend yield over the last 12 months.
Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $14,914 | $15,455 | $15,218 | $17,931 | $19,698 | $20,426 |
| Operating Margins | 19% | 18% | 16% | 17% | 17% | 18% |
| Net Margins | 13% | 11% | 10% | 10% | 11% | 11% |
| Net Income (M) | $1,925 | $1,670 | $1,496 | $1,816 | $2,238 | $2,304 |
| Net Interest Expense (M) | -$374 | -$411 | -$425 | -$365 | -$378 | -$500 |
| Depreciation & Amort. (M) | $1,477 | $1,574 | $1,671 | $1,999 | $2,038 | $2,071 |
| Diluted Shares (M) | 432 | 428 | 425 | 423 | 415 | 407 |
| Earnings Per Share | $4.45 | $3.91 | $3.52 | $4.29 | $5.39 | $5.66 |
| EPS Growth | n/a | -12.13% | -9.97% | 21.88% | 25.64% | 5.01% |
| Avg. Price | $79.31 | $101.74 | $105.18 | $137.17 | $150.83 | $204.39 |
| P/E Ratio | 17.66 | 25.89 | 29.71 | 31.75 | 27.83 | 35.92 |
| Free Cash Flow (M) | $1,899 | $2,059 | $1,818 | $2,299 | $1,727 | $1,824 |
| CAPEX (M) | $1,671 | $1,815 | $1,585 | $2,039 | $2,809 | $2,895 |
| EV / EBITDA | 10.4 | 12.4 | 14.11 | 14.37 | 14.28 | 17.57 |
| Total Debt (M) | $10,026 | $13,498 | $13,810 | $13,405 | $14,984 | $16,229 |
| Net Debt / EBITDA | 2.34 | 2.32 | 3.23 | 2.68 | 2.71 | 2.79 |
| Current Ratio | 0.85 | 1.97 | 1.0 | 0.75 | 0.81 | 0.9 |
Waste Management has growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and positive EPS growth. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.9. Finally, we note that Waste Management has positive cash flows and significant leverage levels.
Waste Management's Valuation Is in Line With Its Sector Averages:
Waste Management has a trailing twelve month P/E ratio of 33.3, compared to an average of 20.3 for the Utilities sector. Based on its EPS guidance of $8.03, the company has a forward P/E ratio of 26.0. The 8.8% compound average growth rate of Waste Management's historical and projected earnings per share yields a PEG ratio of 3.78. This suggests that these shares are overvalued. Furthermore, Waste Management is likely overvalued compared to the book value of its equity, since its P/B ratio of 10.98 is higher than the sector average of 2.25. The company's shares are currently trading 339.1% below their Graham number. Ultimately, Waste Management's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Analysts Give Waste Management an Average Rating of Buy:
The 19 analysts following Waste Management have set target prices ranging from $204.0 to $251.0 per share, for an average of $225.85 with a buy rating. The company is trading -9.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Waste Management has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 84.0% of the company's shares, and the insider ownership rate stands at 0.22%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $7,401,309,018.
