Is it a good company at a reasonable price? This company certainly has great possibilities. It is very risky. It is certainly rapidly growing. It is sort of a dividend growth company, but dividends are exceeding low. The stock price is at the top of its range. It would seem to be relatively expensive currently.
I do not own this stock of GFL Environmental Inc (TSX-GFL, NYSE-GFL). GFL Environmental (TSX-GFL) is small, pays dividend and was talked about by Amy Legate-Wolfe on Motley Fool.
When I was updating my spreadsheet, I noticed that they did not have a good start to this year. The second quarter has revenue and Adjusted EPS down. Analysts also expect this year to have a lower Revenue and lower AEPS. Analyst then expect next year to be better and perhaps a full recovery by 2027.
This company made an unusually large amount for EPS for the first two quarters of 2025, coming in at $9.44. The first two quarters of 2024 had a loss of $1.84. There was a profit in 2025 mainly because of income from discontinued operations.
I noticed that the financials are in CDN$, but the dividends are paid in US$. All the estimates are provided in CDN$.
If you had invested in this company in December 2019, for $1,008.00 you would have bought 45 shares at $22.40 per share. In December 2024, after 5 years you would have received $13.69 in dividends. The stock would be worth $2,883.60. Your total return would have been $2,897.29. This would be a total return of 23.57% per year with 23.39% from capital gain and 0.74% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $22.40 | $1,008.00 | 45 | 5 | $13.69 | $2,883.60 | $2,897.29 |
The dividends are low, so if you buy this stock what sort of dividends would you get in the future? This chart is an attempt to show this. If dividends continue to increase by 8.29% as they have in the past 4 years, what you would get in dividends in 5, 10 and 15 years is shown in the Dividends Paid (Div Pd) column. The next column shows what your yield on the current stock price of $70.00 would be. The last column shows the percentage of your stock’s price would be covered by dividends in 5, 10 and 15 years. Dividends are paid in US$.
| Div Pd | Div Yield | Years | At IRR | Div Cov |
|---|---|---|---|---|
| $0.09 | 0.18% | 5 | 8.29% | 0.72% |
| $0.14 | 0.27% | 10 | 8.29% | 1.61% |
| $0.20 | 0.40% | 15 | 8.29% | 2.94% |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at just 0.12%. Almost no dividends. The 4 year median dividend yield is also low at 0.12%. The dividend growth is moderate (8% to 14% per year) at 8.3% per year over the past 4 years. The last dividend increase was in 2025 and it was for 10%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is non-calculable because of earnings losses. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 9% with 5 year coverage at 13%. The DPR on AEPS is the important one. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 2% with 5 year coverage at 2%. The DPR for 2024 for Free Cash Flow (FCF) is good at 8% with 5 year coverage at 11%. There is no agreement on what the FCF is.
| Item | Cur | 4 Years |
|---|---|---|
| EPS | -3.75% | -3.78% |
| AEPS | 9.42% | 12.96% |
| CFPS | 1.53% | 1.60% |
| FCF | 7.72% | 10.93% |
Debt Ratios are currently fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.34 and currently at 0.26. The Liquidity Ratio for 2024 is far too low at 0.54 and 0.67 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.02 and currently fine at 1.52. The Debt Ratio for 2024 is good at 1.52 and 1.74 currently. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.02 and 1.99 and currently fine at 2.42 and 1.39.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.34 | 0.26 |
| Intang/GW | 0.41 | 0.32 |
| Liquidity | 0.54 | 0.67 |
| Liq. + CF | 1.02 | 1.52 |
| Debt Ratio | 1.52 | 1.74 |
| Leverage | 3.02 | 2.42 |
| D/E Ratio | 1.99 | 1.39 |
The Total Return per year is shown below for years of 5 to 5 to the end of 2024 in CDN$. 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 | 11.65% | 23.57% | 23.39% | 0.17% |
The Total Return per year is shown below for years of 5 to 5 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 | 8.29% | 21.71% | 21.53% | 0.18% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and so unusable. Also, the P/E Ratios for past 10 years and historically are also negative and unusable. The P/E for 2025 is 7.75 and a good ratio, but with an unusually large EPS that will probably not be repeated for some time. EPS losses are again expected in 2026 and 2027.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 65.31, 80.78 and 96.24. (There are only 5 years of data.) The current ratio is 109.38 based on AEPS estimate for 2025 of $0.64 and a stock price $70.00. The current ratio is above the high ratio of the 5 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I noticed that the P/AEPS Ratio for 2026 is 63.06 based on a stock price of $70.00 and AEPS estimate for $1.11. This ratio is below the low ratio of the 5 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $17.08. The 5-year low, median, and high median Price/Graham Price Ratios are 2.34, 3.02 and 3.70. The current ratio is 4.10 based on a stock price of $70.00. This ratio is above the high ratio of the 5 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
The Graham Price for 2026 is $22.49. The 5-year low, median, and high median Price/Graham Price Ratios are 2.34, 3.02 and 3.70. The 2026 ratio is 3.11 based on a stock price of $70.00. This ratio is between the median and the high ratio of the 5 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 5-year median Price/Book Value per Share Ratio of 2.53. The current ratio is 3.46 based on a stock price of $70.00, Book Value of $7,662M and Book Value per Share of $20.25. The current ratio is 37% above the 5 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I have Book Value per Share estimate for 2025 of $18.85. This implies a ratio of 3.71 based on a stock price of $70.00 and a Book Value of $7,130M. Here the ratio is 47% above the 5 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 6-year median Price/Cash Flow per Share Ratio of 16.48. The current ratio is 16.97 based on Cash Flow per Share estimate for 2025 of $4.13, Cash Flow of $1,561M, and a stock price of $70.00. This ratio is 3% above the 6 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 4 year and historical median dividend yield of 0.14%. The current dividend yield is 0.12% based on dividends of $0.0602 and a stock price of $50.48. This dividend yield is 13% below the 4 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median. This testing is in US$ because the dividends are paid in US$. You sort of get the same results in CDN$.
The 6-year median Price/Sales (Revenue) Ratio is 2.32. The current ratio is 4.03 based on Revenue estimate for 2025 of $6,575M, Revenue per Share of $17.38 and a stock price of $70.00. The current ratio is 74% above the 6 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is could still be reasonable, but probably not. The dividend yield test says that the stock price is relatively reasonable, but above the median. The P/S Ratio test does not concur and shows the stock price is expensive. The problem with test using EPS and AEPS is negative earnings or volatility in the earnings. If you look at the price chart on this stock, it is at almost at an all-time high. Other tests vary from reasonable and above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (4), and Hold (3). The consensus is a Strong Buy. The 12 months stock price is $74.25 with a high of 89.00 and low of $58.00. The consensus stock price of $74.25 implies a total return of 6.19% with 6.07% from capital gains and 0.12% from dividends based on a current stock price of $70.00.
There is only one analyst comment on Stock Chase for 2025. The recommendation is a Buy. He says it is a wonderful business run by really good people. Amy Legate-Wolfe on Motley Fool says this stock carries risks but it has the characteristics long term investors look for. Tony Dong on Motley Fool talks about two garbage companies that are growing earnings above the average rates. The company put out a Press Release about their fourth quarter of 2024. The company put out a Press Release on their second quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock. They are concerned about the impact of Unusual Items. The company also got money from an unusual Tax Situation. Simply Wall Street has four warnings on this stock of earnings are forecast to decline by an average of 17.8% per year for the next 3 years; interest payments are not well covered by earnings; large one-off items impacting financial results; and significant insider selling over the past 3 months.
GFL Environmental Inc is an environmental services company. The company's geographical segments are Canada and the United States. The company derives the majority of its revenue from the United States. Its web site is here GFL Environmental Inc.
The last stock I wrote about was about was Badger Infrastructure Solutions Ltd (TSX-BDGI, OTC-BADFF) ... learn more. The next stock I will write about will be Aecon Group Inc (TSX-ARE, OTC-AEGXF) ... learn more on Friday, August 22, 2025 around 5 pm. Tomorrow on my other blog I will write about Canadian Dividend Stocks to Buy.... learn more on Thursday, August 21, 2025 around 5 pm.
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