Back to top

Image: Bigstock

Reasons to Retain Waste Connections Stock in Your Portfolio Now

Read MoreHide Full Article

Waste Connections, Inc. (WCN - Free Report) has had a decent run over the past year. The stock has gained 8.2%, outperforming the industry’s 6.3% rally.

The company has an expected long-term earnings per share (three to five years) growth rate of 11.6%. Earnings are expected to register year-over-year growth of 10% in 2025 and 14% in 2026.

Factors That Augur Well for WCN

Being a leading player in the waste management industry, Waste Connections will likely benefit from ongoing trends such as increasing environmental concerns, rapid industrialization, an increase in population and active government measures to reduce illegal dumping.

With the prime location of disposal sites being within competitive markets, Waste Connections has optimal asset positioning to generate higher profitability. Given the importance and costs associated with waste transportation to treatment and disposal sites, having disposal capacity near the waste stream offers a competitive advantage and a barrier to entry.

Waste Connections has been active on the acquisition front. It follows a strategic combination of financial, market and management criteria to evaluate opportunities from acquisitions. In new markets, it uses its initial buyout as an operating base and seeks to strengthen the acquired operation's presence by providing additional services, adding customers and making “tuck-in” acquisitions of other waste companies in that market or adjacent markets.

In 2024, 2023, 2022 and 2021, Waste Connections completed 24, 13, 24 and 30 acquisitions, respectively. These acquisitions significantly contributed to its revenues, with amounts of $529 million in 2024, $410.9 million in 2023, $552 million in 2022 and $215.39 million in 2021.

Waste Connections is consistent in rewarding its shareholders. In 2024, 2023, 2022 and 2021, WCN paid $302.3 million, $270.6 million, $243 million and $220.2 million in dividends, respectively. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.

A Risk for WCN

Waste Connections' current ratio (a measure of liquidity) at the end of fourth-quarter 2024 was pegged at 0.65, lower than the industry average of 0.93 and had declined 16.3% from the preceding quarter. A current ratio of less than 1 indicates that the company may have problems paying off its short-term obligations.

WCN’s Zacks Rank & Stocks to Consider

WCN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Zacks Business Services sector are AppLovin (APP - Free Report) and PagSeguro Digital Ltd. (PAGS - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AppLovin has a long-term earnings growth expectation of 20%. APP delivered a trailing four-quarter earnings surprise of 23.5%, on average.

PagSeguro Digital has a long-term earnings growth expectation of 13.6%. PAGS delivered a trailing four-quarter earnings surprise of 9.3%, on average.


See More Zacks Research for These Tickers


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


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

AppLovin Corporation (APP) - free report >>

PagSeguro Digital Ltd. (PAGS) - free report >>

Published in