Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America.
The last earnings update was 68 days ago.
Discounted Cash Flow Calculation for DB:UWS using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:UWS DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Waste Management's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Waste Management's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Waste Management's earnings available for a low price, and how does
this compare to other companies in the same industry?
Waste Management's earnings are expected to grow by 1.7% yearly, however this is not considered high growth (20% yearly).
Waste Management's revenue is expected to grow by 4.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Waste Management's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Waste Management's finances.
The net worth of a company is the difference between its assets and liabilities.
Waste Management's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Waste Management's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Waste Management's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.3x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. James C. Fish, Jr. also known as Jim, has been the Chief Executive Officer of Waste Management, Inc. since November 11, 2016 and as has been its President since July 27, 2016. Mr. Fish served as Executive Vice President of Waste Management, Inc. from August 2012 to July 27, 2016 and also served as its Chief Financial Officer since August 2012 until November 18, 2016. He served as Senior Vice President of Eastern Group Operations at Waste Management, Inc. since June 13, 2011 until August 2012. Mr. Fish served as Area Vice President of Pennsylvania and West Virginia Market at Waste Management from 2009 to 2011. He joined Waste Management in 2001 as Director of Financial Planning and Analysis and also served as Vice President of Price Management and was responsible for running its pricing excellence programs. He served as Market Area General Manager — Western Pennsylvania/West Virginia from 2008 to 2009 and Rhode Island/Southern Massachusetts from 2006 to 2008. Mr. Fish held finance or revenue management positions at Westex, a Yellow Corporation subsidiary; Trans World Airlines, Inc. and America West Airlines, Inc. He began his professional career at KPMG Peat Marwick. Mr. Fish has been a Director of Waste Management, Inc. since November 11, 2016. He earned a Bachelor of Science degree in accounting from Arizona State University and his MBA in finance from the University of Chicago. Mr. Fish is a Certified Public Accountant.
Jim's compensation has been consistent with company performance over the past year.
Jim's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Waste Management management team is less than 2 years, this suggests a new team.
Senior VP & CFO
Executive VP & COO
VP & Chief Accounting Officer
Director of Investor Relations
Senior VP & Chief Legal Officer
Senior VP & Chief Human Resources Officer
Senior Vice President of Operations
Senior VP & Chief Digital Officer
Senior VP & Chief Customer Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Waste Management board of directors is about average.
Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It provides collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns, develops, and operates landfill gas-to-energy facilities in the United States, as well as owns and operates transfer stations. As of December 31, 2018, the company owned or operated 247 solid waste landfills; 5 secure hazardous waste landfills; 102 MRFs; and 314 transfer stations. It also provides materials processing and commodities recycling services; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. Further, it offers fluorescent bulb and universal waste mail-back services through LampTracker program; portable restroom services under the Port-o-Let name; and street and parking lot sweeping services, as well as holds interests in oil and gas producing properties. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.
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