Waste Management Inc Stock Buy Recommendation Reiterated (WM)

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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.5%. 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 -22.51%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen 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).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 1.8% when compared to the same quarter one year ago, dropping from $171.00 million to $168.00 million.

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 $19.0 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 19.7% year to date as of the close of trading on Tuesday.

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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