Waste Connections Inc.WCN

Morningstar Rating

Stock Research and Analysis

by Bradley Meeks

In addition to being the most profitable waste hauler we cover, we believe Waste Connections is poised to boost its profitability as a result of the Republic Services RSG-Allied Waste AW merger.

Waste Connections has earned a narrow moat in our view because of inherent barriers to entry in the waste management industry. Read more

Bulls Say

The company has increased its internalization rate 20 percentage points to nearly 70% in eight years, making Waste Connections one of the most profitable solid-waste companies we cover.

Waste haulers exhibit strong business models that provide a necessary and essential service--a combination that creates fairly predictable cash flow throughout a weak economic environment.

The firm focuses on secondary markets in the West--one of the fastest-growing regions in the U.S. Although industry volume growth typically tracks the growth in U.S. gross domestic product, Waste Connections' growth could more closely mirror the economic expansion of its fast-growing markets. Read more

Bears Say

Roughly 20% of the company's revenue is generated in markets where it competes against larger rivals, effectively making Waste Connections a price-taker. Operating margins could compress if pricing pressure re-emerges in the industry.

Approximately half of the company's revenue comes from long-term franchise contracts. Fuel surcharges on these contracts usually lag increases in energy costs and can adversely affect profitability. Read more

Strategy

The company will continue to avoid highly competitive markets that are dominated by larger rivals while acquiring additional waste collection, transfer, and disposal businesses in smaller communities through acquisitions. Read more

Management

We like the Waste Connections management team, which has shown it can successfully integrate acquisitions, increase route density (thereby increasing profitability), and ultimately create shareholder value. The company is led by chairman and CEO Ronald Mittelstaedt, who brings more than 19 years of industry experience to Waste Connections and has been at the helm since 1998. Read more

Profile

Founded in 1997, Waste Connections provides solid waste collection, transfer, disposal, and recycling services to roughly 1.5 million customers in the western and southern U. Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

Growth Stocks in Secular Upcycles
Watch more