Waste Management Inc

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WM : NYSE : Industrial Goods
$73.43 | %
Today's Range: 73.2001 - 73.59
Avg. Daily Volume: 1646200.0
06/23/17 - 4:09 PM ET

Financial Analysis

WASTE MANAGEMENT INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. WASTE MANAGEMENT INC has weak liquidity. Currently, the Quick Ratio is 0.78 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.29% 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 FY17 Q1 FY16
Net Sales ($mil)3440.03176.0
EBITDA ($mil)907.0844.0
EBIT ($mil)556.0509.0
Net Income ($mil)298.0258.0

Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)30.0104.0
Total Assets ($mil)20650.020781.0
Total Debt ($mil)9042.09596.0
Equity ($mil)5517.05290.0

Profitability Q1 FY17 Q1 FY16
Gross Profit Margin37.737.97
EBITDA Margin26.3626.57
Operating Margin16.1616.03
Sales Turnover0.670.63
Return on Assets5.915.48
Return on Equity22.1421.55
Debt Q1 FY17 Q1 FY16
Current Ratio0.870.9
Interest Expense94.097.0
Interest Coverage5.915.25

Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)441.91444.72
Div / share0.430.41
Book value / share12.4811.9
Institutional Own % n/a n/a
Avg Daily Volume1639224.01533128.0


BUY. WASTE MANAGEMENT INC's P/E ratio indicates a discount compared to an average of 35.05 for the Commercial Services & Supplies industry and a value on par with the S&P 500 average of 25.73. Conducting a second comparison, its price-to-book ratio of 5.93 indicates a significant premium versus the S&P 500 average of 3.08 and a premium versus the industry average of 4.98. The current price-to-sales ratio is above the S&P 500 average, but below the industry average. The valuation analysis reveals that, WASTE MANAGEMENT INC seems to be trading at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WM 27.03 Peers 35.05   WM 10.92 Peers 15.57

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.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
WM 21.28 Peers 26.67   WM 1.37 Peers 1.36

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WM is trading at a discount to its peers.


Average. 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 valuation on par to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WM 5.93 Peers 4.98   WM 8.30 Peers 54.66

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

WM is trading at a premium to its peers.


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

However, WM is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WM 2.36 Peers 2.52   WM 5.92 Peers 14.64

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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