This article originally appeared on The DIV-Net December 5, 2011.
Linked here is a detailed quantitative analysis of Waste Management, Inc. (WM). Below are some highlights from the above linked analysis:
Company Description: Waste Management Inc. is a Houston-based company that is the largest U.S. trash hauling/disposal concern.Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
WM is trading at a discount to 1.) and 3.) above. The stock is trading at a slight premium to its calculated fair value of $30.17. WM did not earn any Stars in this section.Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:
1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%
WM earned one Star in this section for 1.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The company has paid a cash dividend to shareholders every year since 1998 and has increased its dividend payments for 8 consecutive years.