Waste Management Inc.

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WM : NYSE : Industrial Services
$85.15 up 1.13 | 1.34%
Today's Range: 83.7 - 85.75
Avg. Daily Volume: 1960000.0
02/16/18 - 4:02 PM ET

Financial Analysis


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 0.73 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 increased by 13.63% 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 Q4 FY17 Q4 FY16
Net Sales ($mil)3652.03460.0
EBITDA ($mil)0.0954.0
EBIT ($mil)0.0622.0
Net Income ($mil)903.0335.0


Balance Sheet Q4 FY17 Q4 FY16
Cash & Equiv. ($mil)22.032.0
Total Assets ($mil)21829.020859.0
Total Debt ($mil)9491.09310.0
Equity ($mil)6019.05297.0


Profitability Q4 FY17 Q4 FY16
Gross Profit Margin0.038.5
EBITDA Margin0.027.57
Operating Margin0.017.98
Sales Turnover0.660.65
Return on Assets8.925.66
Return on Equity32.3822.31
Debt Q4 FY17 Q4 FY16
Current Ratio0.80.85
Debt/Capital0.610.64
Interest Expense96.096.0
Interest Coverage0.06.48


Share Data Q4 FY17 Q4 FY16
Shares outstanding (mil)433.3439.32
Div / share0.430.41
EPS2.060.75
Book value / share13.8912.06
Institutional Own % n/a n/a
Avg Daily Volume2059821.01875720.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 44.21 for the Commercial Services & Supplies industry and a discount compared to the S&P 500 average of 25.51. Conducting a second comparison, its price-to-book ratio of 6.05 indicates a significant premium versus the S&P 500 average of 3.26 and a premium versus the industry average of 5.43. 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WM 19.05 Peers 44.21   WM 11.45 Peers 19.68

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

WM is trading at a significant 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 20.91 Peers 27.04   WM 0.53 Peers 0.89

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.

 

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 6.05 Peers 5.43   WM 66.41 Peers 80.58

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 trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WM 2.51 Peers 2.78   WM 6.43 Peers 11.44

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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