Waste Management is the biggest garbage collecting firm within the United States controlling practically 30% of the garbage disposal marketplace. The business has 43,000 employees and serves roughly 20 million commercial, residential, and business buyers. Waste Management has 367 collection operations, 355 transfer stations, 273 active landfill disposal internet sites, 16 waste-to-energy plants, 134 recycling plants, and 111 beneficial-use landfill gas projects.
Waste Management generated $11.7 billion dollars in sales over the past year year. The business is expecting earn $12.four billion in revenue this year and almost $13 billion in 2011. The business has been in a position to grow earning via enterprise restructuring. Revenue is slated to rise 5% this year and 4% the subsequent year. The business has great operating and profit margins for the waste management business coming in at 16.5% and 8.5% respectively.
The only negative for Waste Management is its huge debt load of $8.8 billion dollars. Waste Management should have no problem servicing its debt with its large amount of free cash flow. Waste Management is a cash machine generating $2.3 billion in free cash last year.
The waste management market is really a defensive market which will thrive throughout booms and recessions. Huge cash inflows and pricing changes are constant threats throughout the business. Waste Management doesn’t face a lot of competition from new marketplace entrants simply because the waste management industry has a high barrier to entry as a result of the big capital needs and all of the federal governmental regulations. Waste Management’s biggest competitor is Republic Services. The two firms together account for more than 50% of the trash collections inside the U.S.
Waste Management has been making all of the right moves. Over the past couple of months firm management has strategically invested in a biofuel plant and acquired assets from a textile company. Management has done an excellent job of increasing the value of the company for shareholders. The business has a return on equity of 16.8% as well as a return on assets just below 6%. Waste Management should continue to grow earnings for years to come.
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