Waste Management Inc Stock Buy Recommendation Reiterated (WM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Waste Management (NYSE: WM) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $577.00 million or 21.47% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -21.76%.
  • WM's share price has surged by 29.17% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • WASTE MANAGEMENT INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, WASTE MANAGEMENT INC reported lower earnings of $1.76 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.76).

Waste Management, Inc. provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling and resource recovery, and disposal services. Waste Management has a market cap of $19.6 billion and is part of the industrial goods sector and materials & construction industry. The company has a P/E ratio of 24.00, above the S&P 500 P/E ratio of 18.00. Shares are up 23.4% year to date as of the close of trading on Monday.

You can view the full Waste Management Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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