A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Waste Management, Inc. WM is waste removal services stock that has performed well in the past year and has the potential to carry the momentum forward. Therefore, 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 Managementan Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Waste Management returned 11%, which compared favorably with the S&P 500’s gain of 6.2%.
Solid Rank & VGM Score: Waste Managementhas a Zacks Rank #2 (Buy) and a Value Growth Momentum Score (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 appears to be a compelling investment proposition at the moment.You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Five estimates for the current year moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2018 increased 1.5%.
Positive Earnings Surprise History: Waste Managementhas an impressive earnings surprise history. The company outpaced the consensus mark in all of the trailing four quarters, delivering a positive average earnings surprise of 4.5%.
Waste Management, Inc. Price and EPS Surprise
Waste Management, Inc. Price and EPS Surprise | Waste Management, Inc. Quote
Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings is currently pegged at $4.14, reflecting year-over-year growth of 28.6%. Moreover, earnings are expected to register 7.1% growth in 2019. The stock has long-term expected earnings per share growth rate of 12.3%.
Growth Factors: Strong performance in the company’s solid waste business continues to boost cash and earnings. Waste Management expects yield momentum to continue in the solid waste lines of business.
The company is focused on maximizing return on disposal network. A strong economy and benefits of volumes from third-party haulers that select the company’s close end disposal sites is leading to higher volume being disposed at its facilities. Waste Management is seeing opportunity to leverage on logistical benefits of its disposal network and increase returns on large investment in the network.
The company continues to execute core operating objectives of focused differentiation and continuous improvement, and instill price and cost discipline. Successful cost-reduction initiatives have helped it accomplish remarkable gross margin expansion and EBITDA growth over the quarters.
Other Stocks to Consider
A few other top-ranked stocks in the Zacks Business Services sectorare WEX Inc WEX, Total System Services, Inc TSS and Automatic Data Processing, Inc ADP, each carrying a Zacks Rank #2.
The long-term expected EPS (three to five years) growth rate for WEX, Total System Services and Automatic Data Processingis 15%, 14.2%, and 12.5%, respectively.
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