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Does Waste Connections, Inc.'s (NYSE:WCN) Past Performance Indicate A Weaker Future?

Simply Wall St

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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Waste Connections, Inc.'s (NYSE:WCN) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.

See our latest analysis for Waste Connections

Despite a decline, did WCN underperform the long-term trend and the industry?

WCN's trailing twelve-month earnings (from 31 December 2018) of US$547m has declined by -5.2% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 34%, indicating the rate at which WCN is growing has slowed down. Why is this? Well, let's look at what's going on with margins and if the entire industry is experiencing the hit as well.

NYSE:WCN Income Statement, March 31st 2019

In terms of returns from investment, Waste Connections has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. Furthermore, its return on assets (ROA) of 5.3% is below the US Commercial Services industry of 7.1%, indicating Waste Connections's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Waste Connections’s debt level, has declined over the past 3 years from 9.3% to 7.4%.

What does this mean?

Waste Connections's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Waste Connections to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for WCN’s future growth? Take a look at our free research report of analyst consensus for WCN’s outlook.
  2. Financial Health: Are WCN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.