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6 Reasons to Add Waste Connections Stock to Your Portfolio

Zacks Equity Research

A wise investment decision involves buying well-performing stocks at the right time and selling those that are at risk. A rise in share price and strong fundamentals indicate a stock’s bullish run.

Waste Connections, Inc. WCN is a waste management stock that has performed well in the past year and has the potential to sustain the momentum, going forward. If you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes Waste Connections an Attractive Pick?

An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Waste Connection’s shares have returned 9.7% compared with the industry’s rise of 2.9%.

Solid Rank & VGM Score: Waste Connections has a Zacks Rank #2 (Buy) and a Value Growth Momentum (VGM) Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities for investors. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Two estimates for 2018 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2018 inched up 0.4%.

Positive Earnings Surprise History: Waste Connections has an impressive earnings surprise history. The company outpaced the consensus mark in three of the trailing four quarters, delivering a positive average earnings surprise of 2.7%.

Waste Connections, Inc. Price and EPS Surprise


Waste Connections, Inc. Price and EPS Surprise | Waste Connections, Inc. Quote


Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings is currently pegged at $2.52, reflecting year-over-year growth of 16.7%. Moreover, earnings are expected to register 14% growth in 2019. The stock has long-term expected earnings per share growth rate of 11.7%.

Growth Factors: Waste Connections is gaining momentum on the back of higher demand for advanced waste collection and recycling techniques. To enhance market opportunities, the company consistently undertakes municipal solid waste and non-hazardous industrial waste recycling measures.

Buyouts are a key growth catalyst for Waste Connections. The company pursues a strategic combination of financial, market and management criteria to evaluate opportunities from acquisitions. Additionally, Waste Connections is focused about “tuck-in” acquisition of other waste management companies, which is likely to boost the top line. In the first nine months of 2018, Waste Connections completed the purchase of 15 individually immaterial non-hazardous solid waste collection, recycling, transfer and disposal businesses.

Finally, Waste Connections has a highly efficient operational structure, which enables it to meet customers’ needs on a real-time basis and at a low cost. Apart from boosting bottom-line growth, an efficient structure also enables the company to pursue expansion endeavors.

Other Stocks to Consider

A few other top-ranked stocks in the Zacks Business Services sector are AstroNova, Inc. ALOT, SPS Commerce, Inc. SPSC and MAXIMUS, Inc. MMS, each sporting a Zacks Rank #1.

The long-term expected EPS (three to five years) growth rate for AstroNova, SPS Commerce and MAXIMUS is 12%, 20%, and 10%, respectively.

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SPS Commerce, Inc. (SPSC) : Free Stock Analysis Report
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