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Growth Strategies Aid Waste Management (WM) Amid Competition

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Waste Management (WM - Free Report) has had an impressive run over the past year. The stock has jumped 29.9%, outperforming 29.3% growth of the industry it belongs to and the 27.7% rise of the Zacks S&P 500 composite.

WM reported impressive fourth-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share of $1.74 surpassed the Zacks Consensus Estimate by 13.7% and improved 33.9% year over year. Total revenues of $5.2 billion beat the consensus estimate by a slight margin and increased 5.7% year over year.

How Is Waste Management Doing?

WM focuses on differentiation and continuous improvement. Also, it instills price and cost discipline to achieve better margins. In order to improve service quality, the company anchors on competitive advantages, cost control and process improvement.

Waste Management's current ratio at the end of fourth-quarter 2023 was 0.90, higher than the preceding quarter’s 0.84 and the year-ago quarter’s 0.81. Increasing current ratio indicates that the company is less likely to face any issues while meeting its short-term obligations.

WM has a dominant market capitalization and a steady dividend and share repurchase policy. In 2023, 2022 and 2021, the company repurchased shares worth $1.3 billion, $1.5 billion and $1.35 billion, respectively. It paid out $1.14 billion, $1.1 billion and $970 million in dividends in 2023, 2022 and 2021, respectively.

Waste Management operates in a highly competitive and consolidated waste industry. National, regional and local companies pose a competitive threat to WM. Increasing prices become tough in a competitive situation, thereby affecting its top line.

The company is witnessing an increase in its financing costs. Net interest expenses were $365 million, $378 million, and $500 million for 2021, 2022, and 2023, respectively.

Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Business Services sector are APi Group (APG - Free Report) and Charles River Associates (CRAI - Free Report) .

APi Group flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APG has a long-term earnings growth expectation of 17.9%. It delivered a trailing four-quarter earnings surprise of 5.1%, on average.

Charles River Associates carries a Zacks Rank of 2 (Buy) at present. It has a long-term earnings growth expectation of 16%.

CRAI delivered a trailing four-quarter earnings surprise of 8.1%, on average.

See More Zacks Research for These Tickers

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Charles River Associates (CRAI) - free report >>

Waste Management, Inc. (WM) - free report >>

APi Group Corporation (APG) - free report >>

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