Fundamental Analysis
Waste Management is the largest environmental solutions provider in North America, serving more than 21 million municipal, commercial and industrial customers in the U.S. and Canada. We have invested in developing waste solutions for a changing world. Today, this includes not just disposal and recycling, but personal counseling to help customers achieve their green goals, including zero waste.
Waste Management is North America’s largest residential recycler and a renewable energy provider. We recover the naturally occurring gas inside landfills to generate electricity, called landfill-gas-to-energy. Waste Management’s fleet of natural gas trucks is the largest heavy-duty truck fleet of its kind in North America. With the largest network of recycling facilities, transfer stations and landfills in the industry, our entire business can adapt to meet the needs of every distinct customer segment.
As North America’s leading provider of comprehensive waste management services, our mission is to maximize resource value while minimizing impact in order to further both economic and environmental sustainability for all of our stakeholders.
Reasons to buy – WASTE MANAGEMENT
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see WASTE MANAGEMENT makes a margin of 17% on Gross Level and about 11% on Net level This means that out of $1 that it makes $0.11 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see net sales grew at an flat rate of 2% in the revenue and the net profit figures grew by 36%. Note the Dividends have increases by 9% which is a sign that the company is willing to give back cash to the shareholders.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see WASTE MANAGEMENT makes a Return on Assets of 7% and Return of Equity of 26% which is pretty good.
Here we see that WASTE MANAGEMENT scores poorly on Return on Assets which could be linked to the high Debt/Equity levels that it maintains. Skip this one for now.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by WASTE MANAGEMENT to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
