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Waste Connections Inc WCN

Morningstar Rating
$167.19 −1.14 (0.68%)
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Company Report

Waste Connections Earnings: Poised for Another Year of Strong Growth and Margin Expansion in 2024

Wide-moat-rated Waste Connections reported strong fourth-quarter results with revenue and adjusted EBITDA increasing 9% and 16% year over year, respectively. The market reacted positively, sending shares up 5% on Feb. 14, as management guided toward a 120-basis-point improvement in adjusted EBITDA margin (to 32.7%) on top of greater than 9% sales growth for fiscal 2024. We expect to raise our fair value estimate for both New York Stock Exchange- and Toronto Stock Exchange-listed shares by approximately 6%, primarily due to our more optimistic view on near-term profit margins.

Price vs Fair Value

WCN is trading at a 23% premium.
Price
$167.19
Fair Value
$326.00
Uncertainty
Low
1-Star Price
$531.00
5-Star Price
$412.40
Economic Moat
Fwbc
Capital Allocation
Trtpqmt

Bulls Say, Bears Say

Bulls

Waste Connections enjoys strong pricing power—a feature of its wide economic moat. This pricing power has allowed the firm to defend profit margins in the current inflationary environment.

Bears

Many U.S. municipalities are gradually pushing for greater solid waste reduction and recycling, which could temper the level of higher-margin waste entering Waste Connections’ landfills over the long run.

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News

Trading Information

Previous Close Price
$168.33
Day Range
$166.88169.37
52-Week Range
$126.12171.49
Bid/Ask
$155.20 / $267.66
Market Cap
$43.08 Bil
Volume/Avg
802,538 / 1.0 Mil

Key Statistics

Price/Earnings (Normalized)
39.90
Price/Sales
5.38
Dividend Yield (Trailing)
0.65%
Dividend Yield (Forward)
0.68%
Total Yield
0.65%

Company Profile

Waste Connections is the third-largest integrated provider of traditional solid waste and recycling services in the North America, operating 103 active landfills (9 are exploration and production waste landfills and 16 are nonmunicipal waste landfills), 157 transfer stations, and 81 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 2023, 12% of consolidated revenue was generated from the firm's Canadian segment.
Sector
Industrials
Industry
Waste Management
Stock Style Box
Large Growth
Total Number of Employees
22,539

Competitors

Valuation

Metric
WCN
SRCL
RSG
Price/Earnings (Normalized)
39.9028.8234.95
Price/Book Value
5.602.085.55
Price/Sales
5.381.923.94
Price/Cash Flow
20.4115.8916.39
Price/Earnings
WCN
SRCL
RSG

Financial Strength

Metric
WCN
SRCL
RSG
Quick Ratio
0.570.760.51
Current Ratio
0.680.900.58
Interest Coverage
4.551.275.22
Quick Ratio
WCN
SRCL
RSG

Profitability

Metric
WCN
SRCL
RSG
Return on Assets (Normalized)
6.19%3.41%5.76%
Return on Equity (Normalized)
14.58%7.44%16.99%
Return on Invested Capital (Normalized)
8.89%5.60%9.37%
Return on Assets
WCN
SRCL
RSG
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Waste Management Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
WM
Waste Management IncGbrkk$83.2 Bil
RSG
Republic Services IncJnmg$58.5 Bil
VEOEF
Veolia Environnement SACrp$23.2 Bil
VEOEY
Veolia Environnement SA ADRMbz$23.2 Bil
GFL
GFL Environmental IncPbdmzj$13.2 Bil
CLH
Clean Harbors IncYmmrhj$9.8 Bil
FMOCF
Fomento de Construcciones y Contratas SAGqk$6.1 Bil
CWST
Casella Waste Systems Inc Class ASqgrll$5.2 Bil
SRCL
Stericycle IncVpzxvp$5.2 Bil

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