Head-To-Head Analysis: Tetra Tech (NASDAQ:TTEK) vs. Waste Management (NYSE:WM)

Waste Management (NYSE:WM) and Tetra Tech (NASDAQ:TTEK) are both large-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares Waste Management and Tetra Tech”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waste Management	$25.20 billion	3.74	$2.71 billion	$7.62	31.14
Tetra Tech	$5.44 billion	1.91	$247.72 million	$1.66	24.49

Waste Management has higher revenue and earnings than Tetra Tech. Tetra Tech is trading at a lower price-to-earnings ratio than Waste Management, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Waste Management has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Tetra Tech has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Waste Management and Tetra Tech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Management	0	8	18	0	2.69
Tetra Tech	0	2	4	0	2.67

Waste Management presently has a consensus price target of $257.04, suggesting a potential upside of 8.33%. Tetra Tech has a consensus price target of $39.00, suggesting a potential downside of 4.06%. Given Waste Management’s stronger consensus rating and higher probable upside, equities analysts plainly believe Waste Management is more favorable than Tetra Tech.

Institutional and Insider Ownership

80.4% of Waste Management shares are held by institutional investors. Comparatively, 93.9% of Tetra Tech shares are held by institutional investors. 0.2% of Waste Management shares are held by insiders. Comparatively, 0.5% of Tetra Tech shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Waste Management and Tetra Tech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waste Management	11.78%	31.97%	6.90%
Tetra Tech	8.60%	22.32%	9.47%

Dividends

Waste Management pays an annual dividend of $3.78 per share and has a dividend yield of 1.6%. Tetra Tech pays an annual dividend of $0.29 per share and has a dividend yield of 0.7%. Waste Management pays out 49.6% of its earnings in the form of a dividend. Tetra Tech pays out 17.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Waste Management has increased its dividend for 23 consecutive years and Tetra Tech has increased its dividend for 11 consecutive years. Waste Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Waste Management beats Tetra Tech on 12 of the 17 factors compared between the two stocks.

About Waste Management

Waste Management, Inc., doing business as WM (NYSE:WM), is an environmental services company that provides waste collection, transportation, disposal, recycling and resource-recovery services. The company serves residential, commercial, industrial and municipal customers through a network of collection operations, transfer stations, landfills, recycling facilities and other environmental infrastructure. WM’s services include curbside and commercial waste collection, construction and demolition debris management, recycling, organics processing and landfill disposal.

About Tetra Tech

Tetra Tech, Inc. is a consulting and engineering services company founded in 1966. It works with government and commercial clients on projects involving water, the environment, infrastructure, energy, and resource management. The company provides services across the project lifecycle, including planning, consulting, engineering, design, and program and construction management. Its work includes water supply and wastewater systems, environmental assessment and remediation, infrastructure development, and climate resilience.