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Here's Why You Should Retain Waste Connections (WCN) Now

Zacks.com logo Zacks.com 11/23/2022

Waste Connections, Inc. WCN is benefiting from a low-overhead, highly-efficient operational structure and investor-friendly steps.

WCN’s earnings and revenues for 2022 are expected to improve 18% and 16.9% each from the respective year-ago reported figures.

Factors That Augur Well

Waste Connections is consistent in rewarding its shareholders. In 2021, WCN paid out $220.2 million of dividends and repurchased shares worth $339 million. In 2020, WCN paid out $199.9 million of dividends and repurchased shares worth $105.7 million. In 2019, WCN disbursed $175.1 million of dividends but did not buy back any shares. Such moves indicate a company’s commitment to creating value for its shareholders and underline its confidence in its business.

WCN generally focuses on providing vertically integrated services from collecting to depositing of solid waste in landfills that it owns or operates. In addition, the operations are managed on a decentralized basis to place the decision-making authority close to the concerned customer, thereby enabling WCN to identify and address customers’ needs on a real-time basis in a cost-effective manner.

WCN’s low-overhead, highly-efficient operational structure allows it to expand into geographically contiguous markets and operate in relatively small communities that its competitors may not find attractive.

Some Risks

Waste Connections’ current ratio (a liquidity measure) at the end of third-quarter 2022 was pegged at 0.89, lower than the current ratio of 1.01 reported at the end of the prior-year quarter. A decreasing current ratio is undesirable as it exposes a company’s inefficiency in meeting its short-term debt obligations.

Zacks Rank and Stocks to Consider

Waste Connections currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding Corporation BAH, Paychex, Inc. PAYX and Cross Country Healthcare, Inc. CCRN.

Booz Allen carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 8.9%.

Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.

Paychex carries a Zacks Rank of 2 at present. PAYX has a long-term earnings growth expectation of 7.5%.

Paychex delivered a trailing four-quarter earnings surprise of 8.6%, on average.

Cross Country Healthcare is currently Zacks #2 Ranked. CCRN has a long-term earnings growth expectation of 6%.

CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.

 

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