Is it a good company at a reasonable price? This stock has going up strongly for a while. It is now just off its all-time high. Some analysts also think that the stock price is high. It is generally not good to buy a stock near its all time high. However, this stock, even though it is in a mundane business of garbage has done well for its shareholders. It is testing as rather on the expensive side.
I do not own this stock of Waste Connections Inc (TSX-WCN, NYSE-WCN), but I used to. I first bought this stock in 2007 because TD Securities had a very favorable report on this stock and had it on their action buy list. I had money because I had recently sold RIM. At that time, it was BFI Canada Income Fund. In 2010, I needed to buy something for Pension Account. I have this already and it is on TD Action Buy List. I sold when it because the target of a reverse takeover by an American company.
When I was updating my spreadsheet, I noticed that this stock has taken off since the reverse takeover.
If you had invested in this company in December 2014, for $1,015.60 you would have bought 21 shares at $48.36 per share. In December 2024, after 10 years you would have received $205.63 in dividends. The stock would be worth $5,178.60. Your total return would have been $5,384.23. This would be a total return of 18.61% per year with 17.69% from capital gain and 0.91% from dividends. This is in CDN$.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $48.36 | $1,015.60 | 21 | 10 | $205.63 | $5,178.60 | $5,384.23 |
If you had invested in this company in December 2014, for $1,041.17 you would have bought 25 shares at $41.65 per share. In December 2024, after 10 years you would have received $183.45 in dividends. The stock would be worth $4,289.50. Your total return would have been $4,472.95. This would be a total return of 18.08% per year with 15.21% from capital gain and 0.88% from dividends. This is in US$.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $41.65 | $1,041.17 | 25 | 10 | $183.45 | $4,289.50 | $4,472.95 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 0.67%. The 5, 10 and historical dividend yields are also low at 0.74%, 0.77% and 1.14%. The dividend growth is moderate (8% to 14% ranges) at 12% per year over the past 5 years. The last dividend increase was in 2024 and it was for 10.5%.
The Dividend Payout Ratios (DPR) are good. The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 49% with 5 year coverage at 41%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 24% with 5 year coverage at 26%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 12% with 5 year coverage at 13%. The DPR for 2024 for Free Cash Flow (FCF) is good at 22% with 5 year coverage at 23%. There is some agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 48.95% | 40.70% |
| AEPS | 24.43% | 25.55% |
| CFPS | 12.38% | 12.84% |
| FCF | 21.90% | 23.32% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.18 and currently at 0.17. The Liquidity Ratio for 2024 is far too low at 0.65 and 0.70 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.68 and currently at 1.92. The Debt Ratio for 2024 is good at 1.66 and 1.65 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.52 and 1.52and currently at 2.53 and 1.53.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.18 | 0.17 |
| Intang/GW | 0.22 | 0.21 |
| Liquidity | 0.65 | 0.70 |
| Liq. + CF | 1.68 | 1.92 |
| Debt Ratio | 1.66 | 1.65 |
| Leverage | 2.52 | 2.53 |
| D/E Ratio | 1.52 | 1.53 |
The Total Return per year is shown below for years of 5 to 23 to the end of 2024 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 14.28% | 16.69% | 15.89% | 0.79% |
| 2014 | 10 | 15.27% | 18.61% | 17.69% | 0.91% |
| 2009 | 15 | 6.99% | 17.99% | 17.01% | 0.99% |
| 2004 | 20 | 3.26% | 11.58% | 10.43% | 1.16% |
| 2001 | 23 | 5.25% | 15.56% | 13.34% | 2.23% |
The Total Return per year is shown below for years of 5 to 23 to the end of 2024 in US$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 11.96% | 14.38% | 13.58% | 0.81% |
| 2014 | 10 | 12.81% | 16.08% | 15.21% | 0.88% |
| 2009 | 15 | 4.77% | 15.60% | 14.61% | 0.98% |
| 2004 | 20 | 2.34% | 10.87% | 9.58% | 1.29% |
| 2001 | 23 | 5.69% | 18.93% | 15.16% | 3.77% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 43.83, 49.87 and 58.50. The corresponding 10 year ratios are 34.74, 41.07 and 48.00. The corresponding historical ratios are 25.19, 29.56 and 33.93. The current P/E Ratio is 40.60 based on a current stock price of $258.50 and EPS estimate for 2025 of $6.37 ($4.64 US$). The current ratio is between the low and median ratios of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median. This testing is in CDN$.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 30.14, 33.92 and 39.45. The corresponding 10 year ratios are 28.20, 32.74 and 36.28. The corresponding historical ratios are 24.09, 29.25 and 34.40. The current P/E Ratio is 36.07 based on a current stock price of $258.50 and AEPS estimate for 2025 of $7.17 ($5.22US$). The current ratio is between the median and high ratios of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in CDN$.
I get a Graham Price of $82.92. The 10-year low, median, and high median Price/Graham Price Ratios are 2.03, 2.40 and 2.77. The current P/GP Ratio is 3.12 based on a stock price of $258.50. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This testing is in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 3.10. The current P/B Ratio is 6.08 based on a Stock Price of $188.83, Book Value of $8,014M and Book Value per Share of $31.06. The current ratio is 96% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a similar result in CDN$.
I also have a Book Value per Share estimate for 2025 of $32.68. This implies a ratio of 5.78 based on a stock price of $188.83 and a Book Value of $8,432M. This ratio is 87% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a similar result in CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio of 14.26. The current ratio is 19.09 based on Cash Flow per Share estimate for 2025 of $9.89, Cash Flow of $2,553M and a stock price of $188.83. The current ratio is 35% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a similar result in CDN$.
I get an historical median dividend yield of 1.13%. The current dividend yield is 0.67% based on dividends of $1.26 and a stock price of $188.83. The current dividend is 41% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a similar result in CDN$.
I get a 10 year median dividend yield of 0.79%. The current dividend yield is 0.67% based on dividends of $1.26 and a stock price of $188.83. The current dividend is 16% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$ and you will get a similar result in CDN$.
The 10-year median Price/Sales (Revenue) Ratio is 4.02. The current P/S Ratio is 5.11 based on Revenue estimate for 2025 of $9,530M, Revenue per Share of $36.94 and a stock price of $188.83. The current ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This testing is in US$ and you will get a slightly different result in CDN$. However, the financial statements and estimates are in US$, so I will go with the US$ results.
Results of stock price testing is that the stock price could be reasonable, but is probably expensive. The 10 year dividend yield testing is saying that the stock price is reasonable but above the median. This is not confirmed by the P/S Ratio testing that says the stock price is relatively expensive. A number of my tests are saying that the stock price is relatively expensive. However, the P/AEPS says it is reasonable but above the median. This is a better test that the P/E Ratio test. The P/GP Ratio test says that the stock price is expensive.
When I look at analysts’ recommendations, I find Strong Buy (12), Buy (6), Hold (6), Underperform (1), and Sell (1). The consensus would be a Buy. However, there is no consensus by the analysts and views cover all possible values. The 12 month stock price consensus is $289.33 ($210.76 US$) with a High of $315.74 ($230.00 US$) and low of $205.92 ($150.00 US$). The consensus stock price $289.33 implies a total return of $12.60% with 11.93% from capital gains and 0.67% from dividends based on a current stock price of $258.50.
Analyst on Stock Chase for 2025 are positive about this stock and think it is a buy. Rajiv Nanjapla on Motley Fool thinks you should buy this stock for diversification and defense. Adam Othman on Motley Fool thinks you should invest in this company because of its growth prospects. The company put out a press release on Newswire about their fourth quarter of 2024. The company put out a press release on Newswire about their first quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and thinks that the ROE is far too low. Simply Wall Street has one warning out on this stock of has a high level of debt.
Waste Connections is the third-largest integrated provider of traditional solid waste and recycling services in the North America. Its web site is here Waste Connections Inc.
The last stock I wrote about was about was Lassonde Industries Inc (TSX-LAS.A, OTC-LSDAF) ... learn more. The next stock I will write about will be CI Financial Corp (TSX-CIX, NYSE-CIXX) ... learn more on Wednesday, June 25, 2025 around 5 pm. Tomorrow on my other blog I will write about Decolonizing and India.... learn more on Thursday, June 12, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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