Waste Connections (NYSE:WCN), a waste management company, has seen its share price rise by 84% over the past five years. While this outperforms the broader market, recent gains have slowed down, with shareholders gaining just 11%, including dividends. In light of these numbers, it is worth examining the company’s underlying fundamentals to determine if they have been driving its long-term performance.
By comparing earnings per share (EPS) and share price changes over time, we can get an idea of how investor attitudes towards Waste Connections have evolved. Over the past five years, the company has managed to grow its EPS at an average annual rate of 4.9%, which is lower than the 12% average annual increase in its share price. This suggests that the market has a higher opinion of Waste Connections now compared to five years ago, likely due to its track record of earnings growth.
The total shareholder return (TSR), which includes the value of dividends and the benefit of any discounted capital raising or spin-off, offers a more comprehensive picture than the share price return alone. Waste Connections’ TSR for the last five years was 84%, surpassing the share price return mentioned earlier. This can be attributed to its dividend payments.
In the past year, Waste Connections’ TSR was in line with the market average at 11%. However, when looking at the longer-term performance, the company has provided consistent annual returns of 13% over the past five years. While recent share price growth has slowed, the overall outlook for Waste Connections remains positive, making it a stock worth watching.
To fully understand Waste Connections, it is important to consider other factors beyond share price performance. For instance, it is worth noting that the CEO’s remuneration is relatively modest compared to CEOs at similarly capitalized companies. However, the key question for investors is whether the company can continue to grow its earnings in the future.
In conclusion, investors who invested in Waste Connections five years ago have seen gains of 84%. The company has shown consistent earnings growth, and its total shareholder return has outperformed the market. While recent gains have been less impressive, the overall long-term performance of Waste Connections is favorable. Investors should consider multiple factors beyond share price when evaluating the company’s prospects.
Please note that the information provided in this article is based on historical data and analyst forecasts. It is not intended to be financial advice, and investors should conduct their own research before making investment decisions.
