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Reasons to Buy Waste Connections (WCN) for Your Portfolio
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Waste Connections, Inc. (WCN - Free Report) has performed well in the past six-months period with the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time that you add the stock to your portfolio.
Let’s look at the factors that make the stock an attractive pick.
An Outperformer: Shares have gained 8.1% in the past six-month period compared with the 3.8% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Waste Connections currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, WCN seems an appropriate investment proposition at the moment. You can seethe complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Six estimates for 2022 have moved north in the past 60 days versus two southward revisions, indicating analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved up 0.8% in the past 60 days.
Positive Earnings Surprise History: Waste Connections has an impressive earnings surprise history. WCN’s bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missing the same in one), the average surprise being 2.8%.
Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $3.75, implying growth of 16.1% from the year-ago reported figure. Moreover, earnings are expected to register 14.4% growth in 2023. WCN’s long-term expected earnings per share (EPS) growth rate is 12.7%.
Driving Factors: Waste Connections targets secondary and rural markets to garner a higher local market share, which will be difficult to attain in more competitive urban markets. This decreases its exposure to customer churn and helps improve its financial returns.
In certain niche markets, like E&P waste treatment and disposal, early mover advantage in certain rural basins plays a key role in improving market positioning and generating higher financial returns, given the limited availability of the existing third-party-owned waste disposal alternatives.
Waste Connections is consistent in rewarding its shareholders. In 2021, WCN paid out $220.2 million of dividend and repurchased shares worth $339 million. In 2020, it disbursed $199.9 million of dividend and bought back shares worth $105.7 million. In 2019, WCN paid out $175.1 million of dividend but did not repurchase any shares. Such moves underpin its commitment to add shareholder value and instill confidence in its business.
Image: Shutterstock
Reasons to Buy Waste Connections (WCN) for Your Portfolio
Waste Connections, Inc. (WCN - Free Report) has performed well in the past six-months period with the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time that you add the stock to your portfolio.
Let’s look at the factors that make the stock an attractive pick.
An Outperformer: Shares have gained 8.1% in the past six-month period compared with the 3.8% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Waste Connections currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, WCN seems an appropriate investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Six estimates for 2022 have moved north in the past 60 days versus two southward revisions, indicating analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved up 0.8% in the past 60 days.
Positive Earnings Surprise History: Waste Connections has an impressive earnings surprise history. WCN’s bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missing the same in one), the average surprise being 2.8%.
Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $3.75, implying growth of 16.1% from the year-ago reported figure. Moreover, earnings are expected to register 14.4% growth in 2023. WCN’s long-term expected earnings per share (EPS) growth rate is 12.7%.
Driving Factors: Waste Connections targets secondary and rural markets to garner a higher local market share, which will be difficult to attain in more competitive urban markets. This decreases its exposure to customer churn and helps improve its financial returns.
In certain niche markets, like E&P waste treatment and disposal, early mover advantage in certain rural basins plays a key role in improving market positioning and generating higher financial returns, given the limited availability of the existing third-party-owned waste disposal alternatives.
Waste Connections is consistent in rewarding its shareholders. In 2021, WCN paid out $220.2 million of dividend and repurchased shares worth $339 million. In 2020, it disbursed $199.9 million of dividend and bought back shares worth $105.7 million. In 2019, WCN paid out $175.1 million of dividend but did not repurchase any shares. Such moves underpin its commitment to add shareholder value and instill confidence in its business.
Other Stocks to Consider
Investors interested in the broader Zacks Business Services sector can also consider stocks like Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank of 1 at present. CAR has an earnings growth rate of 108.4% for 2022.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank #2 (Buy) at present. G has a long-term earnings growth expectation of 12.3%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International flaunts a Zacks Rank of 1, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.