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Reasons to Retain Waste Connections (WCN) in Your Portfolio
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Waste Connections, Inc. (WCN - Free Report) is capitalizing on current trends, including the growing emphasis on environmental issues and the swift pace of industrialization. The company's strategy of prioritizing secondary and rural markets is helping it secure a more significant share in local markets. Low liquidity is a cause of concern.
WCN has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Augur Well
Waste Connections strategically targets secondary and rural markets, where competition is less intense, with an aim to secure a robust local market share. This approach minimizes the risk of customer turnover and enhances financial performance. Particularly in niche markets like E&P waste treatment, the company benefits from being an early mover in certain rural basins, capitalizing on limited alternatives for third-party waste disposal. The focus remains on increasing market penetration, providing additional services and leveraging franchise-based platforms to expand the customer base into non-exclusive market territories.
Waste Connections actively pursues acquisitions, evaluating opportunities based on financial, market, and management criteria. When entering new markets, the company uses the initial acquisition as a foundation and enhances the acquired operation by offering additional services, acquiring more customers and making "tuck-in" acquisitions of other waste companies in the same or adjacent markets. In 2022, 2021, and 2020, Waste Connections successfully completed 24, 30 and 21 acquisitions, respectively, contributing significantly to its revenues to the tune of $552 million in 2022, $215.39 million in 2021 and $197.23 million in 2020. Notable acquisitions include American Disposal Services, Groot Industries and Progressive Waste.
WCN maintains a continuous commitment to rewarding its shareholders consistently. In 2022, 2021 and 2020, the company distributed dividends of $243 million, $220.2 million and $199.9 million, respectively. Additionally, shares worth $425 million, $339 million and $105.7 million were repurchased during the same periods. These actions underscore the company's dedication to creating value for shareholders and demonstrate confidence in its business.
Some Risks
Waste Connections' current ratio at the end of second-quarter 2023 was pegged at 0.76, lower than the current ratio of 0.94 reported at the end of the year-ago quarter. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
The company operates in the United States and Canada. The operation in Canada exposes the company to foreign currency exchange risk. WCN faces operational risks in the form of truck accidents, equipment defects, malfunctions and failures.
WCN currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector that may be considered
Fiserv (FI - Free Report) :TheZacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow by 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, with an average surprise of 0.6%.
DocuSign (DOCU - Free Report) :The Zacks Consensus Estimate of DocuSign’s 2023 revenues indicates 8.6% growth from the year-ago figure while earnings are expected to grow by 29.1%. The company has beaten the consensus estimate in the four quarters, with an average surprise of 27.1%.
The company holds a Zacks Rank of 2 and has a VGM Score of B.
Broadridge Financial Solutions (BR - Free Report) :The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.5% growth from the year-ago figure while earnings are expected to grow by 9.8%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, with an average surprise of 5.4%.
BR holds a Zacks Rank of 2.
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Reasons to Retain Waste Connections (WCN) in Your Portfolio
Waste Connections, Inc. (WCN - Free Report) is capitalizing on current trends, including the growing emphasis on environmental issues and the swift pace of industrialization. The company's strategy of prioritizing secondary and rural markets is helping it secure a more significant share in local markets. Low liquidity is a cause of concern.
WCN has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Augur Well
Waste Connections strategically targets secondary and rural markets, where competition is less intense, with an aim to secure a robust local market share. This approach minimizes the risk of customer turnover and enhances financial performance. Particularly in niche markets like E&P waste treatment, the company benefits from being an early mover in certain rural basins, capitalizing on limited alternatives for third-party waste disposal. The focus remains on increasing market penetration, providing additional services and leveraging franchise-based platforms to expand the customer base into non-exclusive market territories.
Waste Connections, Inc. Revenue (TTM)
Waste Connections, Inc. revenue-ttm | Waste Connections, Inc. Quote
Waste Connections actively pursues acquisitions, evaluating opportunities based on financial, market, and management criteria. When entering new markets, the company uses the initial acquisition as a foundation and enhances the acquired operation by offering additional services, acquiring more customers and making "tuck-in" acquisitions of other waste companies in the same or adjacent markets. In 2022, 2021, and 2020, Waste Connections successfully completed 24, 30 and 21 acquisitions, respectively, contributing significantly to its revenues to the tune of $552 million in 2022, $215.39 million in 2021 and $197.23 million in 2020. Notable acquisitions include American Disposal Services, Groot Industries and Progressive Waste.
WCN maintains a continuous commitment to rewarding its shareholders consistently. In 2022, 2021 and 2020, the company distributed dividends of $243 million, $220.2 million and $199.9 million, respectively. Additionally, shares worth $425 million, $339 million and $105.7 million were repurchased during the same periods. These actions underscore the company's dedication to creating value for shareholders and demonstrate confidence in its business.
Some Risks
Waste Connections' current ratio at the end of second-quarter 2023 was pegged at 0.76, lower than the current ratio of 0.94 reported at the end of the year-ago quarter. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
The company operates in the United States and Canada. The operation in Canada exposes the company to foreign currency exchange risk. WCN faces operational risks in the form of truck accidents, equipment defects, malfunctions and failures.
WCN currently holds a Zacks Rank #3 (Hold).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector that may be considered
Fiserv (FI - Free Report) :TheZacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow by 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, with an average surprise of 0.6%.
The company holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DocuSign (DOCU - Free Report) :The Zacks Consensus Estimate of DocuSign’s 2023 revenues indicates 8.6% growth from the year-ago figure while earnings are expected to grow by 29.1%. The company has beaten the consensus estimate in the four quarters, with an average surprise of 27.1%.
The company holds a Zacks Rank of 2 and has a VGM Score of B.
Broadridge Financial Solutions (BR - Free Report) :The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.5% growth from the year-ago figure while earnings are expected to grow by 9.8%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, with an average surprise of 5.4%.
BR holds a Zacks Rank of 2.