Waste Management (WM)
Industrials · NYSE · US
Fundamentals
Valuation and ratings
Waste Management trades at $242.25, which is 19% above the $196.59 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 59 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 33.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Waste Management
Waste Management, Inc., through its subsidiaries, provides environmental solutions to residential, commercial, industrial, and municipal customers in the United States, Canada, Western Europe, and internationally. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, recovery facility, or disposal site; owns and operates transfer stations; and owns, develops, and operates landfill gas-to-energy facilities that produce renewable electricity and renewable natural gas. It also operates materials processing and commodities recycling services, including cardboard, paper, glass, metals, plastics, construction and demolition materials, and other recycling commodities are recovered for resale or redirected for other purposes; markets and resells recycling commodities; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company collects recyclable food and yard waste, as well as markets and sells mulch, compost, soil amendments, and renewable energy; offers remediation and construction, and industrial waste services; and manages and markets fly ash. Further, it provides Regulated Waste and Compliance Services (RWCS), which offers compliance programs, as well as collection, processing, and disposal of regulated and specialized waste, including medical, pharmaceutical, and hazardous waste; and Secure Information Destruction (SID) services that include the collection of personal and confidential information for secure destruction and recycling of sorted office paper. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was founded in 1968 and is based in Houston, Texas.
WM passes 1 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
16 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Bill Gates, GATES FOUNDATION TRUST$6.35B · 20.1% of book
- Capital Research Global, Capital Research Global Investors$2.01B · 0.3% of book
- Parnassus Investments, PARNASSUS INVESTMENTS, LLC$1.14B · 3.4% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$468.59M · 0.4% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$185.25M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Waste Management (WM) undervalued?
Against our discounted cash flow estimate of $196.59, WM at $242.25 is 19% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own WM?
16 of the institutions we track reported a position in WM in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is WM's P/E ratio?
WM trades at 33.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for WM, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.