Back to top

Image: Shutterstock

Here's Why Investors Should Hold Waste Connections (WCN) Now

Read MoreHide Full Article

Waste Connections, Inc. (WCN - Free Report) is benefiting from a low-overhead, highly-efficient operational structure and investor-friendly steps.

WCN’s earnings and revenues for 2022 are expected to improve 18% and 16.9%, respectively, from the year-ago reported figures. Shares of WCN have surged 7.7% in the past six-month period compared with 4.5% rise of the industry it belongs to.

Zacks Investment Research
Image Source: Zacks Investment Research

Factors That Augur Well

WCN generally focuses on providing vertically integrated services from collecting to depositing of solid waste in landfills that it owns or operates. In addition, the operations are managed on a decentralized basis to place the decision-making authority close to the concerned customer. This enables WCN to identify and address customers’ needs on a real-time basis in a cost-effective manner.

WCN’s low-overhead, highly-efficient operational structure allows it to expand into geographically contiguous markets and operate in relatively small communities that its competitors may not find attractive.

Waste Connections is consistent in rewarding its shareholders. In 2021, 2020 and 2019, WCN paid out dividends of $220.2 million, $199.9 million and $175.1 million, respectively.

In 2021 and 2022, the company repurchased shares worth $339 million and $105.7 million, respectively. In 2019, WCN did not buy back any shares. Such moves indicate a company’s commitment to creating value for its shareholders and underline its confidence in its business.

Some Risks

Waste Connections’ current ratio (a liquidity measure) at the end of third-quarter 2022 was pegged at 0.89, lower than the current ratio of 1.01 reported at the end of the prior-year quarter. A decreasing current ratio is undesirable as it exposes a company’s inefficiency in meeting its short-term debt obligations.

Zacks Rank and Stocks to Consider

Waste Connections currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation (BAH - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Booz Allen carries a Zacks Rank #2 (Buy), presently. BAH has a long-term earnings growth expectation of 8.9%.

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

CRA International carries a Zacks Rank of 2 at present. CRAI has a long-term earnings growth expectation of 14.3%.

CRA International delivered a trailing four-quarter earnings surprise of 25.7%, on average.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Charles River Associates (CRAI) - free report >>

Waste Connections, Inc. (WCN) - free report >>

Booz Allen Hamilton Holding Corporation (BAH) - free report >>

Published in