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Waste Connections Inc WCN

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Volumes Rebounded and Pricing Remained Strong During Waste Connections' Second Quarter

Analyst Note

| Brian Bernard, CFA, CPA |

Waste Connections enjoyed double-digit top-line growth and solid margin expansion as the wide-moat-rated waste management firm benefited from normalizing end markets. Revenue increased 17.5% year over year to over $1.5 billion, primarily driven by an 11.4% increase in solid waste volume and price, strong recycling performance, and acquisitions. Volume increased 6.5% year over year on an easy prior-year comparison (year-ago volume was down nearly 10%) and the core price was strong at 4.7% (up 20 basis points sequentially and year over year). Volume gains differed across regions depending, in part, on the severity of coronavirus-related restrictions. For example, Canadian volumes increased nearly 10.5%, the Western United States saw volumes rebound about 8.5%, while the Central U.S. saw a milder 4% gain in volumes. Management said landfill volume and roll-off pulls have returned to prepandemic levels.

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Company Profile

Business Description

Waste Connections is the third- largest integrated provider of traditional solid waste and recycling services in the North America, operating 91 active landfills (12 are E&P waste landfills), 132 transfer stations, and 68 recycling operations. The firm serves residential, commercial, industrial, and energy end markets. Waste Connections entered the Canadian market with its 2016 merger with Progressive Waste. In 2020, 13% of consolidated revenue was generated from the firm's Canadian segment.

Contact
610 Applewood Crescent, 2nd Floor
Vaughan, ON, L4K 0E3, Canada
T +1 905 532-7510
Sector Industrials
Industry Waste Management
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 18,933

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