Critical Review: Waste Connections (WCN) & Its Competitors

Waste Connections (NYSE:WCN) is one of 354 public companies in the “Commercial Services & Supplies” industry, but how does it weigh in compared to its peers? We will compare Waste Connections to related businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Institutional and Insider Ownership

86.1% of Waste Connections shares are owned by institutional investors. Comparatively, 39.5% of shares of all “Commercial Services & Supplies” companies are owned by institutional investors. 0.3% of Waste Connections shares are owned by company insiders. Comparatively, 16.9% of shares of all “Commercial Services & Supplies” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Waste Connections and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Waste Connections	$9.47 billion	$1.08 billion	42.25
Waste Connections Competitors	$2.45 billion	$140.58 million	11.88

Waste Connections has higher revenue and earnings than its peers. Waste Connections is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Waste Connections has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Waste Connections’ peers have a beta of 2.62, suggesting that their average share price is 162% more volatile than the S&P 500.

Dividends

Waste Connections pays an annual dividend of $1.40 per share and has a dividend yield of 0.7%. Waste Connections pays out 31.3% of its earnings in the form of a dividend. As a group, “Commercial Services & Supplies” companies pay a dividend yield of 2.5% and pay out 64.7% of their earnings in the form of a dividend. Waste Connections has increased its dividend for 8 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Waste Connections and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Connections	0	2	16	1	2.95
Waste Connections Competitors	1905	6248	9030	664	2.47

Waste Connections currently has a consensus target price of $203.22, suggesting a potential upside of 7.60%. As a group, “Commercial Services & Supplies” companies have a potential upside of 11.23%. Given Waste Connections’ peers higher possible upside, analysts plainly believe Waste Connections has less favorable growth aspects than its peers.

Profitability

This table compares Waste Connections and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waste Connections	11.40%	17.76%	6.69%
Waste Connections Competitors	-67.44%	-119.23%	-1.34%

Summary

Waste Connections beats its peers on 11 of the 15 factors compared.

Waste Connections Company Profile

Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. Waste Connections, Inc. was founded in 1997 and is based in Woodbridge, Canada.