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Waste Management Inc
WM : NYSE : Industrial Goods
$60.41 up0.57 | 0.95%
Today's Range: 59.44 - 60.46
Avg. Daily Volume: 2,580,300
05/04/16 - 4:02 PM ET

Financial Analysis


WASTE MANAGEMENT INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. WASTE MANAGEMENT INC has weak liquidity. Currently, the Quick Ratio is 0.82 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.75% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)3176.03040.0
EBITDA ($mil)844.0768.0
EBIT ($mil)509.0454.0
Net Income ($mil)258.0-129.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)104.0277.0
Total Assets ($mil)20781.020691.0
Total Debt ($mil)9596.09207.0
Equity ($mil)5290.05554.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin37.9736.71
EBITDA Margin26.5725.26
Operating Margin16.0314.93
Sales Turnover0.630.66
Return on Assets5.484.54
Return on Equity21.5516.94
Debt Q1 FY16 Q1 FY15
Current Ratio0.91.15
Debt/Capital0.640.62
Interest Expense97.0108.0
Interest Coverage5.254.2


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)444.72457.76
Div / share0.410.39
EPS0.58-0.28
Book value / share11.912.13
Institutional Own % n/a n/a
Avg Daily Volume2559598.02131183.0

Valuation


BUY. WASTE MANAGEMENT INC's P/E ratio indicates a discount compared to an average of 28.09 for the Commercial Services & Supplies industry and a value on par with the S&P 500 average of 24.06. Conducting a second comparison, its price-to-book ratio of 5.04 indicates a significant premium versus the S&P 500 average of 2.74 and a premium versus the industry average of 4.64. The current price-to-sales ratio is above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WM 23.71 Peers 28.09   WM 9.86 Peers 13.94

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WM is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WM 19.86 Peers 23.31   WM 0.34 Peers 4.07

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WM is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WM trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WM 5.04 Peers 4.64   WM 24.63 Peers 14.24

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WM is trading at a valuation on par with its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

WM is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WM 2.04 Peers 1.97   WM -3.99 Peers 1.62

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WM is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WM significantly trails its peers on the basis of sales growth

 

 

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