Contrasting Casella Waste Systems (CWST) and Waste Management (WM)

Casella Waste Systems (NASDAQ: CWST) and Waste Management (NYSE:WM) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

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This is a summary of recent ratings and price targets for Casella Waste Systems and Waste Management, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Casella Waste Systems 0 1 3 0 2.75
Waste Management 0 1 8 0 2.89

Casella Waste Systems presently has a consensus price target of $22.25, suggesting a potential downside of 10.46%. Waste Management has a consensus price target of $90.25, suggesting a potential upside of 9.02%. Given Waste Management’s stronger consensus rating and higher probable upside, analysts plainly believe Waste Management is more favorable than Casella Waste Systems.

Profitability

This table compares Casella Waste Systems and Waste Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Casella Waste Systems -3.64% -58.61% 4.76%
Waste Management 13.45% 25.48% 6.77%

Institutional and Insider Ownership

81.2% of Casella Waste Systems shares are owned by institutional investors. Comparatively, 76.7% of Waste Management shares are owned by institutional investors. 11.5% of Casella Waste Systems shares are owned by company insiders. Comparatively, 0.3% of Waste Management shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Waste Management pays an annual dividend of $1.86 per share and has a dividend yield of 2.2%. Casella Waste Systems does not pay a dividend. Waste Management pays out 57.8% of its earnings in the form of a dividend. Waste Management has raised its dividend for 14 consecutive years.

Risk and Volatility

Casella Waste Systems has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Waste Management has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares Casella Waste Systems and Waste Management’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Casella Waste Systems $599.31 million 1.75 -$21.79 million $0.67 37.09
Waste Management $14.49 billion 2.48 $1.95 billion $3.22 25.71

Waste Management has higher revenue and earnings than Casella Waste Systems. Waste Management is trading at a lower price-to-earnings ratio than Casella Waste Systems, indicating that it is currently the more affordable of the two stocks.

Summary

Waste Management beats Casella Waste Systems on 12 of the 17 factors compared between the two stocks.

About Casella Waste Systems

Casella Waste Systems, Inc., together with its subsidiaries, operates as a vertically-integrated solid waste services company in the northeastern United States. The company operates through Eastern Region, Western Region, Recycling, and Other segments. It offers resource management services primarily in the areas of solid waste collection and disposal, transfer, recycling, and organics services to residential, commercial, municipal, and industrial customers. The company provides a range of non-hazardous solid waste services, including collections, transfer stations, material recovery facilities, and disposal facilities. It also processes and markets recyclable metals, aluminum, plastics, and paper and corrugated cardboard, as well as recyclables purchased from third-parties. In addition, the company is involved in commodity brokerage operations. As of January 31, 2018, it owned and/or operated 32 solid waste collection operations, 47 transfer stations, 18 recycling facilities, 9 Subtitle D landfills, 4 landfill gas-to-energy facilities, and 1 landfill permitted to accept construction and demolition materials. Casella Waste Systems, Inc. was founded in 1975 and is headquartered in Rutland, Vermont.

About Waste Management

Waste Management, Inc., through its subsidiaries, provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. It provides collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns, develops, and operates landfill gas-to-energy facilities in the United States, as well as owns and operates transfer stations. As of December 31, 2017, the company owned or operated 244 solid waste landfills; 5 secure hazardous waste landfills; 90 MRFs; and 305 transfer stations. It also provides materials processing and commodities recycling services; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. Further, it portable self-storage and long distance moving services; fluorescent bulb and universal waste mail-back services through LampTracker program; portable restroom services under the Port-o-Let name; and street and parking lot sweeping services, as well as holds interests in oil and gas producing properties. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.

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