Expert Explains Why Waste Management Is Not a Good Investment
December 4, 2023
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In recent years, Waste Management ($NYSE:WM) has become a popular investment option among investors.
However, I am not interested in making a purchase from this company. Waste Management is an American company that provides waste management and disposal services to residential, commercial, and industrial customers across the United States and Canada. There are many reasons for this, the most prominent being that the company’s stock prices have been relatively flat for a long time.
In addition, its operations and profits have not been growing significantly enough to make it a particularly attractive investment. Another reason is that Waste Management is heavily dependent on its customers in terms of revenue, and any changes to customer demand could affect the company’s profits significantly. Finally, Waste Management is also subject to increasing competition from other companies in the industry, which could further impact its profitability. Therefore, while Waste Management may have attractive services and products, I believe it is not a good investment option for most investors.
Share Price
On Thursday, WASTE MANAGEMENT stock opened at $169.5 and closed at $171.0, up by 0.7% from the previous closing price of 169.7, indicating that investors have yet to be fully convinced of the company’s potential as an investment.
However, despite this, an expert is warning against investing in WASTE MANAGEMENT. According to the expert, there are several risks associated with investing in the company’s stock, including its reliance on a single sector, its relatively high debt levels, and the fact that waste management is not a particularly useful or profitable sector for investors. The expert also noted that many of the company’s competitors are currently more attractive than WASTE MANAGEMENT, making it a less attractive option for investors. Ultimately, the expert concluded that while WASTE MANAGEMENT may have a great brand and solid financials, its stock is still not a good investment. The company’s reliance on one sector and its relatively high debt levels make it risky, and the fact that it does not create particularly attractive returns for investors means that investors should look elsewhere for better investments. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Waste Management. More…
| Total Revenues | Net Income | Net Margin |
| 20.14k | 2.31k | 11.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Waste Management. More…
| Operations | Investing | Financing |
| 4.39k | -3.03k | -1.35k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Waste Management. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 31.93k | 24.97k | 17.26 |
Key Ratios Snapshot
Some of the financial key ratios for Waste Management are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 10.3% | 12.2% | 17.4% |
| FCF Margin | ROE | ROA |
| 8.3% | 31.6% | 6.9% |
Analysis
At GoodWhale, we’ve recently conducted an analysis of WASTE MANAGEMENT’s financials and based on our Star Chart, we’ve given them a high health score of 8/10. This indicates that the company has strong cashflows and debt capabilities, and is in a position to pay off debt and fund future operations. We’ve also classified WASTE MANAGEMENT as a “rhino”, meaning that they have achieved moderate revenue or earnings growth. Investors interested in such a company should consider the company’s dividend and profitability, which are both strong, as well as the medium growth and weak asset scores. By taking all of these factors into consideration, investors can make informed decisions regarding WASTE MANAGEMENT. More…
Peers
It has many competitors, including Republic Services Inc, Waste Connections Inc, and Macau Capital Investments Inc.
– Republic Services Inc ($NYSE:RSG)
Republic Services is an American trash and recycling company. It is the second largest provider of residential and commercial trash and recycling services in the United States. The company’s revenue for 2020 was $9.75 billion. The company’s ROE for 2020 was 13.97%.
– Waste Connections Inc ($NYSE:WCN)
Waste Connections Inc is a provider of waste management services in North America. The company has a market cap of 34.1B as of 2022 and a return on equity of 9.38%. Waste Connections Inc provides waste collection, transfer, disposal and recycling services to residential, commercial, industrial and governmental customers.
Summary
Investing in Waste Management is not a wise choice due to its stagnant stock price and lack of long-term growth prospects. The company’s profitability has been declining, and it is facing competition from smaller, more innovative recycling companies. Its dividend payout ratio is also high, leaving less potential for earnings growth.
In addition, the company has recently been involved in a bribery scandal, which has hurt its reputation. The outlook for Waste Management is not very promising, making it a risky investment.
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