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Waste Connections (WCN) Gains 12.7% in 6 Months: Here's How

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Waste Connections, Inc. (WCN - Free Report) shares have had an impressive run over the past six months. The stock rallied 12.7%compared with the 1.7% rise of the industry it belongs to and the 2.5% decline of the Zacks S&P 500 composite.

 

Reasons for the Upside

Waste Connections’ performance is being driven by acquisitions, operating efficiency and an increase in prices charged to customers.

The company has been active on the acquisition front, following a strategic combination of financial, market and management criteria to evaluate opportunities. Acquisitions completed during and after the third quarter of 2021 increased revenues by $154.1 million for the third quarter of 2022. Prices charged to customers increased $154.2 million year over year in the third quarter of 2022. Adjusted EBITDA of $588.1 million rose 16.3% year over year.

Waste Connections is consistent in rewarding its shareholders. In 2021, the company paid $220.2 million in dividends and repurchased shares worth $339 million. In 2020, it paid $199.9 million in dividends and repurchased shares worth $105.7 million. In 2019, the company paid $175.1 million in dividends but did not repurchase any shares. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.

Favorable Estimates Revision  

The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Ten estimates for 2022 have moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company.

Over the same period, the Zacks Consensus Estimate for 2022 earnings has climbed 1.6%.

Zacks Rank and Stocks to Consider

Waste Connections currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH - Free Report) and Cross Country Healthcare, Inc. (CCRN - Free Report) .

Booz Allen carries a Zacks Rank #2 at present. BAH has a long-term earnings growth expectation of 8.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Booz Allen delivered a trailing four-quarter earnings surprise of 8.8% on average.

Cross Country Healthcare is currently a Zacks #2 Ranked stock. CCRN has a long-term earnings growth expectation of 6%.

CCRN delivered a trailing four-quarter earnings surprise of 10.1% on average.

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