Waste Management, Inc. ( WM Quick Quote WM - Free Report) is benefiting from its core operating performance, steady shareholder-friendly measures and solid liquidity.
The company’s earnings and revenues for 2023 are expected to grow 7.9% and 4.8%, respectively. WM has a long-term (three to five years) expected earnings growth rate of 10.1%.
Factors Favoring WM
Being a leading provider of comprehensive waste management environmental services, WM is expected to continue benefiting from ongoing trends like increasing environmental concerns, rapid industrialization, increase in population and active government measures to reduce illegal dumping. The company’s top line increased 5% year over year in the first quarter of 2023.
Waste Management continues to execute core operating initiatives, targeting focused differentiation and continuous improvement, and instilling price and cost discipline to achieve better margins. While differentiation through the capitalization of extensive assets ensures long-term profitable growth and competitive advantages, cost control, process improvement and enhancements to its digital platform help enhance service quality.
WM's current ratio at the end of first-quarter 2023 was pegged at 0.87, higher than the prior-year quarter’s current ratio of 0.80. An increase in the current ratio bodes well, as it indicates the company’s efficiency in meeting its short-term debt obligations.
The company has a steady dividend and a share repurchase policy. In 2022, 2021 and 2020, it repurchased shares worth $1.5 billion, $1.4 billion and $402 million, respectively. It paid out $1.1 billion, $970 million and $927 million in dividends in 2022, 2021 and 2020, respectively. WM plans to return significant cash to shareholders through healthy dividends and share repurchases in the future.
Waste Management has more current debt outstanding than cash. Cash and cash equivalents at the end of fourth-quarter 2022 were $257 million, while the current debt level was $336 million.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks
Business Services sector are DocuSign ( DOCU Quick Quote DOCU - Free Report) , Green Dot ( GDOT Quick Quote GDOT - Free Report) , and Maximus ( MMS Quick Quote MMS - Free Report) .
For the first quarter of fiscal 2023, the Zacks Consensus Estimate of DocuSign’s revenues is expected to grow 8.9% year over year to $641.2 million and the same for earnings suggests an increase of 39.5% to 53 cents per share. The company has an impressive earning surprise history, beating the Zacks Consensus mark in three instances and missing on one instance. It has an average surprise of 12.3%.
DOCU has a growth score of A and a Zacks Rank of 2 (Buy) at present. You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
For second-quarter 2023, the Zacks Consensus Estimate of Green Dot’s revenues is expected to decline 4.2% year over year to $340.1 million and the same for earnings indicates a 52.7% dip to 35 cents. The company has an impressive earning surprise history, beating the Zacks Consensus mark in all four trailing quarters. It has an average surprise of 37.3%.
GDOT has a Value score of A and currently sports a Zacks Rank of 1 (Strong Buy).
For second-quarter 2023, the Zacks Consensus Estimate of Maximus’ revenues is expected to grow 6.1% year over year to 1.2 billion and the same for earnings indicates a 33.3% rise to $1.04. The company has an impressive earning surprise history, beating the Zacks Consensus mark in three instances and missing on one instance. It has an average surprise of 9.6%.
MMS has a VGM score of A and a Zacks Rank of 2.