Waste Management Inc reported a solid QQ3 2024, with revenue of $5.609 billion, up 7.9% year over year and 3.8% quarter over quarter. The quarter delivered a healthy EBITDA of $1.717 billion (EBITDA margin 30.6%), operating income of $1.127 billion (operating margin 20.1%), and net income of $0.76 billion (net margin 13.5%), corresponding to diluted EPS of $1.88-$1.89. Free cash flow ($577 million) and robust operating cash flow ($1.359 billion) underscore the company’s ability to fund dividends and capital expenditure while maintaining a sizable net debt position. Net debt stood at approximately $16.0 billion against total assets of $34.73 billion, with a debt-to-capitalization metric near 0.676 and a current ratio of 0.89, signaling liquidity below 1x on a strict current-basis but supported by strong cash conversion and ongoing capex discipline.
The quarter's results point to stable underlying demand for integrated waste management services in North America, supported by pricing power and efficiency gains in collection, transfer, and disposal operations. Profitability remains resilient despite the high capital intensity of the business and a sizable debt load, as evidenced by an interest-coverage ratio of about 8.6x and sizable free cash flow generation. Management commentary (where available) has historically underscored the importance of disciplined capital allocation—balancing dividends, debt reduction, and selective growth investments—an approach the QQ3 2024 results appear to reinforce. While revenue growth and margins are solid, the elevated leverage remains a key consideration for investors given sensitivity to interest rates and regulatory cycles.
Looking ahead, the absence of explicit forward guidance in the provided materials necessitates reliance on the company’s cash-generative profile, industry fundamentals, and the trajectory of capital allocation. Investors should monitor debt repayment progress, capital expenditure plans, recycling/commodity pricing dynamics, and regulatory developments that could influence costs and volumes. Overall, the QQ3 2024 results reinforce Waste Management’s role as a cash-generating, shareholder-friendly utility-like player within Industrials, albeit with meaningful leverage that requires careful ongoing management.
Cash flow and liquidity:
- Net cash provided by operating activities: $1.359 billion.
- Free cash flow: $0.577 billion (FCF per share $1.44).
- Net capital expenditure: $(0.781) billion; acquisitions net $(0.498) billion.
- Dividends paid: $(0.301) billion; net cash used in financing: $(0.439) billion.
- Ending cash and cash equivalents: $0.614 billion; net debt: $16.039 billion; total debt: $16.653 billion.
- Cash flow conversion and coverage: operating cash flow to net income roughly 1.79x; interest expense $0.131 billion; interest coverage 8.6x.
Balance sheet and leverage:
- Total assets: $34.73 billion; total liabilities: $26.76 billion; total stockholders’ equity: $7.98 billion.
- Current ratio 0.89; quick ratio 0.85; cash ratio 0.13—reflecting a liquidity profile that is strong on cash flow generation but modest on balance-sheet liquidity metrics.
- Debt to capitalization: 0.676; long-term debt to capitalization: 0.667; net debt to EBITDA: approximately 9.3x, indicating a high leverage level relative to earnings.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
5.61B
7.91%
3.83%
Gross Profit
1.65B
-17.81%
5.36%
Operating Income
1.13B
10.38%
5.62%
Net Income
760.00M
14.63%
11.76%
EPS
1.89
15.24%
11.83%
Key Financial Ratios
currentRatio
0.89
grossProfitMargin
29.5%
operatingProfitMargin
20.1%
netProfitMargin
13.5%
returnOnAssets
2.19%
returnOnEquity
9.53%
debtEquityRatio
2.09
operatingCashFlowPerShare
$3.38
freeCashFlowPerShare
$1.44
dividendPayoutRatio
39.6%
priceToBookRatio
10.41
priceEarningsRatio
27.33
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript data provided. As a result, management quotes, thematic takeaways, and call-specific guidance could not be extracted from the source text.
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Forward Guidance
No formal forward guidance was included in the provided data. Given the operating cash flow strength and ongoing capital allocation discipline, the business is likely to continue funding dividend payments and capex while managing leverage over time. Investors should monitor (i) debt reduction progress and any refinancing risk given elevated net debt, (ii) capital expenditures and ROI on growth projects (including potential energy-from-waste opportunities and recycling initiatives), (iii) commodity price dynamics in recycling, and (iv) regulatory developments affecting landfill, environmental, and waste-collection costs.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0LTG.L Focus
29.45%
20.10%
9.53%
27.33%
0K8M.L
41.20%
41.20%
7.97%
12.75%
0J1R.L
13.80%
13.80%
-58.20%
20.62%
0JT5.L
49.00%
33.10%
14.00%
17.53%
0KYY.L
61.80%
39.20%
2.86%
41.18%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
WM presents a defensible cash-generating profile with a clear ability to fund dividends and capex, supported by strong EBITDA and cash flow. However, the elevated debt load remains the dominant risk, particularly if interest rates rise or if regulatory requirements tighten. The company’s long-term value hinges on deleveraging progress, ROI on growth investments (including energy-from-waste and recycling initiatives), and the ability to sustain margins amid inflation and capital outlays. The stock may appeal to investors seeking stable, regulated-like cash flows and a reliable dividend, but the elevated leverage warrants a cautious stance and close monitoring of deleveraging progress and capex ROI.
Key Investment Factors
Growth Potential
Large-scale utility-like cash flows with potential growth from energy-from-waste investments, expanded recycling capabilities, and pricing power in waste collection and disposal services.
Profitability Risk
High leverage and interest costs, regulatory and environmental compliance risk, volatility in recycling commodity prices, and continued capital intensity with substantial capex requirements.
Financial Position
Solid operating cash flow generation supports dividends and capex; however, net debt remains elevated. Liquidity metrics are modest, and debt/ capitalization indicates ongoing leverage management is essential.
SWOT Analysis
Strengths
Market leadership and scale in North American waste management
Diversified asset base across collection, transfer stations, MRFs, and landfills
Strong free cash flow generation and consistent dividend capacity