Waste Management Inc (WM) Financial Statements

Waste Management's financial profile presents a mix of high-quality profitability metrics and some points for caution. The company demonstrates strong returns on capital, with an ROE of 27.1%, which far exceeds the 15-20% threshold for a high ROIC. Its operating margin of 17.1% and profit margin of 10.7% indicate efficient operations. Free cash flow generation is positive, with a 3.1% yield, though it does not meet the framework's >10-15% FCF margin benchmark when calculated against revenue. The balance sheet is a key area of focus; a Debt/Equity ratio of 2.29 is high and exceeds the framework's favourable threshold of low/zero debt (Debt/EBITDA < 1.0x), indicating significant leverage that warrants monitoring. Revenue growth of 7.1% YoY is consistent but in the single digits, which is sustainable for a mature industrial but does not meet the double-digit, high-growth trajectory outlined in the framework. There is no indication of margin compression, as the operating margin is robust. Overall, the company scores well on profitability and returns but shows unfavourable marks on balance sheet strength and only neutral marks on revenue growth velocity when assessed against value-investing benchmarks for high-quality compounders. Analysis based on data as of 2024-05-15.