NYSE:WM

Stock Analysis Report

Executive Summary

Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America.

Rewards

Trading at 5.7% below its fair value

Earnings are forecast to grow 10.59% per year

Pays a high and reliable dividend of 1.74%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Waste Management's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.8%

WM

2.8%

US Commercial Services

1.7%

US Market


1 Year Return

26.5%

WM

23.1%

US Commercial Services

23.2%

US Market

Return vs Industry: WM exceeded the US Commercial Services industry which returned 23.7% over the past year.

Return vs Market: WM exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

WMIndustryMarket
7 Day2.8%2.8%1.7%
30 Day6.1%4.2%4.2%
90 Day2.1%4.9%11.9%
1 Year28.8%26.5%27.7%23.1%25.8%23.2%
3 Year82.5%71.5%66.8%55.8%52.8%42.9%
5 Year153.7%125.5%108.6%87.4%75.2%55.8%

Price Volatility Vs. Market

How volatile is Waste Management's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Waste Management undervalued compared to its fair value and its price relative to the market?

5.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WM ($118.07) is trading below our estimate of fair value ($125.23)

Significantly Below Fair Value: WM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: WM is poor value based on its PE Ratio (28.6x) compared to the Commercial Services industry average (26.4x).

PE vs Market: WM is poor value based on its PE Ratio (28.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: WM is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: WM is overvalued based on its PB Ratio (7.4x) compared to the US Commercial Services industry average (2.1x).


Next Steps

Future Growth

How is Waste Management forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

10.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WM's forecast earnings growth (10.6% per year) is above the savings rate (1.7%).

Earnings vs Market: WM's earnings (10.6% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: WM's earnings are forecast to grow, but not significantly.

Revenue vs Market: WM's revenue (5.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: WM's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WM's Return on Equity is forecast to be high in 3 years time (27.8%)


Next Steps

Past Performance

How has Waste Management performed over the past 5 years?

20.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WM has high quality earnings.

Growing Profit Margin: WM's current net profit margins (11.4%) are lower than last year (15.6%).


Past Earnings Growth Analysis

Earnings Trend: WM's earnings have grown significantly by 20.6% per year over the past 5 years.

Accelerating Growth: WM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WM had negative earnings growth (-23.6%) over the past year, making it difficult to compare to the Commercial Services industry average (-1.3%).


Return on Equity

High ROE: Whilst WM's Return on Equity (25.86%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Waste Management's financial position?


Financial Position Analysis

Short Term Liabilities: WM's short term assets ($5.6B) exceed its short term liabilities ($3.0B).

Long Term Liabilities: WM's short term assets ($5.6B) do not cover its long term liabilities ($17.3B).


Debt to Equity History and Analysis

Debt Level: WM's debt to equity ratio (192%) is considered high.

Reducing Debt: WM's debt to equity ratio has increased from 179.3% to 192% over the past 5 years.

Debt Coverage: WM's debt is well covered by operating cash flow (28.9%).

Interest Coverage: WM's interest payments on its debt are well covered by EBIT (7x coverage).


Balance Sheet

Inventory Level: WM has a high level of physical assets or inventory.

Debt Coverage by Assets: WM's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

What is Waste Management's current dividend yield, its reliability and sustainability?

1.72%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.6%industryaverage1.5%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: WM's dividend (1.74%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: WM's dividend (1.74%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: WM's dividends per share have been stable in the past 10 years.

Growing Dividend: WM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.5%), WM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WM's dividends in 3 years are forecast to be well covered by earnings (45.5% payout ratio).


Next Steps

Management

What is the CEO of Waste Management's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Jim Fish (57yo)

3.2yrs

Tenure

US$9,125,281

Compensation

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 Execu ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD9.13M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

46yo

Average Age

Experienced Management: WM's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

61yo

Average Age

Experienced Board: WM's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: WM insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$112,00021 Nov 19
Michael Watson
EntityIndividual
Role
Senior Key Executive
Senior VP & Chief Customer Officer
Shares1,000
Max PriceUS$112.00
SellUS$73,18209 May 19
Michael Watson
EntityIndividual
Role
Senior Key Executive
Senior VP & Chief Customer Officer
Shares700
Max PriceUS$104.55

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Fish (57yo)

    President

    • Tenure: 3.2yrs
    • Compensation: US$9.13m
  • Chuck Boettcher (45yo)

    Senior VP & Chief Legal Officer

    • Tenure: 3yrs
  • John Morris (49yo)

    Executive VP & COO

    • Tenure: 1yrs
    • Compensation: US$3.19m
  • Tara Hemmer (46yo)

    Senior Vice President of Operations

    • Tenure: 7.8yrs
  • Devina Rankin (43yo)

    Senior VP & CFO

    • Tenure: 2.9yrs
    • Compensation: US$2.85m
  • Leslie Nagy (45yo)

    VP & Chief Accounting Officer

    • Tenure: 2.2yrs
  • Tamla Oates-Forney (47yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 1.1yrs
  • Ed Egl

    Director of Investor Relations

    • Nikolaj Sjoqvist (46yo)

      Senior VP & Chief Digital Officer

      • Tenure: 2.3yrs
    • Michael Watson (49yo)

      Senior VP & Chief Customer Officer

      • Tenure: 1.3yrs

    Board Members

    • Pat Gross (74yo)

      Independent Director

      • Tenure: 13.6yrs
      • Compensation: US$289.95k
    • Frank Clark (73yo)

      Independent Director

      • Tenure: 17.3yrs
      • Compensation: US$284.95k
    • Tom Weidemeyer (71yo)

      Non-Executive Chairman

      • Tenure: 1.8yrs
      • Compensation: US$405.84k
    • Vicki Holt (61yo)

      Independent Director

      • Tenure: 7yrs
      • Compensation: US$264.95k
    • Bill Plummer (60yo)

      Independent Director

      • Tenure: 0.4yrs
    • Jack Pope (70yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$264.95k
    • Jim Fish (57yo)

      President

      • Tenure: 3.2yrs
      • Compensation: US$9.13m
    • Andrés Ricardo Gluski Weilert (61yo)

      Independent Director

      • Tenure: 5yrs
      • Compensation: US$264.95k
    • Kathleen Mazzarella (59yo)

      Independent Director

      • Tenure: 4.3yrs
      • Compensation: US$274.95k

    Company Information

    Waste Management, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Waste Management, Inc.
    • Ticker: WM
    • Exchange: NYSE
    • Founded: 1987
    • Industry: Environmental and Facilities Services
    • Sector: Commercial Services
    • Market Cap: US$50.693b
    • Shares outstanding: 424.24m
    • Website: https://www.wm.com

    Number of Employees


    Location

    • Waste Management, Inc.
    • 1001 Fannin Street
    • Suite 4000
    • Houston
    • Texas
    • 77002
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    WMNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1988
    UWSDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1988
    0LTGLSE (London Stock Exchange)YesCommon StockGBUSDJun 1988
    WMWBAG (Wiener Boerse AG)YesCommon StockATEURJun 1988
    UWSETLX (Eurotlx)YesCommon StockITEURJun 1988
    W1MC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 2 COMBRBRLDec 2019

    Biography

    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. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/17 01:37
    End of Day Share Price2020/01/16 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.