Financial Analysis: Waste Management (WM) & Its Competitors

Waste Management (NYSE: WM) is one of 304 public companies in the “BUSINESS SERVICES” industry, but how does it weigh in compared to its competitors? We will compare Waste Management to similar businesses based on the strength of its profitability, risk, valuation, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Ratings

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This is a breakdown of recent ratings for Waste Management and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Waste Management 0 0 8 0 3.00
Waste Management Competitors 1128 5276 7878 223 2.50

Waste Management presently has a consensus price target of $89.86, indicating a potential upside of 8.39%. As a group, “BUSINESS SERVICES” companies have a potential upside of 11.29%. Given Waste Management’s competitors higher probable upside, analysts plainly believe Waste Management has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares Waste Management and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Waste Management $14.49 billion $1.95 billion 18.80
Waste Management Competitors $3.01 billion $233.50 million 31.13

Waste Management has higher revenue and earnings than its competitors. Waste Management is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Waste Management and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Waste Management 13.45% 25.48% 6.77%
Waste Management Competitors -158.38% -95.28% -3.28%

Volatility & Risk

Waste Management has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Waste Management’s competitors have a beta of 1.01, suggesting that their average stock price is 1% more volatile than the S&P 500.

Institutional & Insider Ownership

76.8% of Waste Management shares are owned by institutional investors. Comparatively, 57.4% of shares of all “BUSINESS SERVICES” companies are owned by institutional investors. 0.2% of Waste Management shares are owned by insiders. Comparatively, 16.0% of shares of all “BUSINESS SERVICES” companies are owned 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.

Dividends

Waste Management pays an annual dividend of $1.86 per share and has a dividend yield of 2.2%. Waste Management pays out 42.2% of its earnings in the form of a dividend. As a group, “BUSINESS SERVICES” companies pay a dividend yield of 1.6% and pay out 47.0% of their earnings in the form of a dividend. Waste Management has increased its dividend for 14 consecutive years. Waste Management is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

Waste Management beats its competitors on 10 of the 15 factors compared.

About Waste Management

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, 2017, the company owned or operated 244 solid waste landfills; 5 secure hazardous waste landfills; 90 MRFs; and 305 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 portable self-storage and long distance moving services; 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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