Waste Connections Inc.

Waste Connections Inc. Q3 2017 EPS $0.75 vs. estimates of $0.72

Management Commentary

-“Continued strength across all lines of business enabled us to once again exceed our outlook for the third quarter”, said Ronald J. Mittelstaedt, Chairman and Chief Executive Officer.

-He also added: “Our strong operating performance, free cash flow growth and balance sheet strength provided for another double-digit percentage increase in the quarterly cash dividend.”

Financial Highlights

-Revenue up 11.15% to $1.206 Billion.

-Adjusted net income up 25% to $151 Million.

-Adjusted EBITDA of 32.6% of revenue, 100 basis points.

-Dividend increased 16.7%.

My Comments

-Waste Connections is a solid long-term business that provides an exceptional total return of dividend growth and capital appreciation.

-The stock is up 27.48% as of October 25 2017, and further gains may prove difficult this year following the spike after the beat, but shareholders should hold as the dividend continues to increase.

-There is not a business like Waste Connections on the TSX, and as markets continue higher, investors may rotate into a defensive business like Waste Connections as fears of a pullback escalate.

Key Metrics

-EPS 10-year average growth of 10.59%.

-Revenue 10-year average growth of 15.14%.

Recommendation: Hold

-On a larger market pullback, add to Waste Connections as it should be viewed as a core long-term holding.

-Dividend growth stocks have outperformed through the bull-market along with those with economic moats, Waste Connections falls into this category.


I, Jared Flomen, do not own shares of Waste Connections.

Please consult a financial advisor before making investment decisions. This report represents my views, not actionable advice.