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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Waste Management (NYSE:WM). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Waste Management with the means to add long-term value to shareholders.
How Fast Is Waste Management Growing?
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Over the last three years, Waste Management has grown EPS by 16% per year. That's a good rate of growth, if it can be sustained.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Waste Management achieved similar EBIT margins to last year, revenue grew by a solid 8.0% to US$22b. That's encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
View our latest analysis for Waste Management
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Waste Management.
Are Waste Management Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$91b company like Waste Management. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth US$181m. We note that this amounts to 0.2% of the company, which may be small owing to the sheer size of Waste Management but it's still worth mentioning. So despite their percentage holding being low, company management still have plenty of reasons to deliver the best outcomes for investors.