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Here's Why You Should Retain Waste Connections (WCN) Now
Waste Connections, Inc. (WCN - Free Report) is benefiting from a low-overhead, highly-efficient operational structure and investor-friendly steps.
WCN has a long-term earnings growth expectation of 12.7%. The Zacks Consensus Estimate for 2023 earnings indicates an increase of 11.4% year over year to $4.24 per share.
Factors That Augur Well
Waste Connections generally focuses on providing vertically integrated services from collection through the disposal of solid waste in landfills that it owns or operates. In addition, the operations are managed on a decentralized basis to place decision-making authority close to the customer, enabling WCN to identify and address customers’ needs on a real-time basis in a cost-effective manner. WCN’s low overhead and a 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, WCN paid out $220.2 million of dividends and repurchased shares worth $339 million. In 2020, WCN paid out $199.9 million of dividends and repurchased shares worth $105.7 million. In 2019, WCN disbursed $175.1 million of dividends but 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.
Waste Connections current ratio (a measure of liquidity) at the end of third-quarter 2022 was pegged at 0.89, lower than the current ratio of 0.94 at the end of the previous quarter and 1.01 reported at the end of the prior-year quarter. Decreasing the current ratio is not desirable as it indicates that the company may have problems 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 Paychex, Inc. (PAYX - Free Report) and The Interpublic Group of Companies, Inc. (IPG - Free Report) .
Paychex carries a Zacks Rank #2 (Buy) at present. PAYX has a long-term earnings growth expectation of 7.5%.
Paychex delivered a trailing four-quarter earnings surprise of 5.9%, on average.
Interpublic is currently Zacks #2 Ranked. IPG has a long-term earnings growth expectation of 3.70%.
IPG delivered a trailing four-quarter earnings surprise of 8.9%, on average.