For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Waste Management (
WM Quick Quote WM - Free Report) ten years ago? It may not have been easy to hold on to WM for all that time, but if you did, how much would your investment be worth today? Waste Management's Business In-Depth
With that in mind, let's take a look at Waste Management's main business drivers.
Headquartered in Houston, Texas, Waste Management Inc. is a leading provider of comprehensive waste management services in North America. The company provides collection, transfer, recycling and resource recovery, as well as disposal services to residential, commercial, industrial and municipal customers. It is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the United States.
Waste Management provides collection services that include picking up and transporting waste and recyclable materials from the point of generation to a transfer station, disposal site or material recovery facility (MRF). The company owns, develops, and operates landfill gas-to-energy facilities in the United States. It owns and operates transfer stations.
Waste Management also provides materials processing, commodities recycling and recycling brokerage services. It also offers construction and remediation services; services associated with the disposal of fly ash and residue, in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations.
The company faces intense competition from governmental, quasi-governmental and private organizations in all aspects of its operations. It competes mainly with large national waste management companies, municipalities and counties that manage their own waste collection and disposal operations. It also competes with regional and local companies of different sizes and financial resources.
Waste Management's operating revenues remain higher in summer months, mainly due to higher construction and demolition waste volumes. Also, in certain regions, volumes industrial and residential waste increase during summer months. Hence, revenues in second and third quarters are significantly higher than first and fourth quarters.
As of Dec 31, 2020, Waste Management had roughly 48,250 full-time employees. Around 9,100 were in administrative and sales positions and the rest in operations. Approximately 8,750 employees were covered by collective bargaining agreements. Formerly known as USA Waste Services, Inc., the company changed name to Waste Management, Inc. in 1998. Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Waste Management ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in August 2011 would be worth $4,749.54, or a gain of 374.95%, as of August 27, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 279.84% and gold's return of -5.52% over the same time frame.
Looking ahead, analysts are expecting more upside for WM.
Waste Management's shares have outperformed its industry in the past year, partly due to earnings and revenue beat in the past four quarters. The company continues to execute its core operating initiatives of focused differentiation and continuous improvement and instill price and cost discipline to achieve better margins. Strength across traditional solid waste business boost the company's cash and earnings. Successful cost-reduction initiatives have helped it achieve better margins. Consistent dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. However, operating in a highly competitive and consolidated waste industry weigh's on the company's top line. High debt may limit the copany's future expansion and worsen its risk profile. Seasonality is another concern.
Over the past four weeks, shares have rallied 5.05%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.