Why Waste Management Shares are Undervalued and a Great Investment Opportunity

Waste Management (WM) has been a leading company in the waste management and environmental services field for over 50 years. They are constantly innovating and providing environmentally responsible solutions for their customers. However, as an investor, you may not realize that their shares are undervalued based on the discounted cash-flow model. In this article, we will delve into why WM shares are a great investment opportunity.

Firstly, let's talk about what the discounted cash flow model is and why it’s important. The discounted cash flow model is a way to estimate the intrinsic value of a stock. It takes into account the company’s earnings per share (EPS) and growth rate to determine how much the stock is actually worth. As mentioned earlier, Waste Management has an EPS of 5.57 and a growth rate of 8%, which puts its intrinsic value at $211 per share. This is a significant difference from the current share price of $157, giving WM a 25% margin of safety.

Secondly, we need to consider the stock's performance in the last year. Waste Management's current stock price is only 6% above its 52-week low. This indicates that the share price has not been reflecting the company's true value. The stock market can be volatile, but investing in a stock that is undervalued can give a great return in the long term. Waste Management has been consistently profitable and continues to grow, which means that the shares will likely increase in value over time.

Thirdly, let's talk about dividends. Waste Management pays a quarterly dividend to its shareholders. Dividends are a great way to earn passive income from your investments. The dividend yield for WM is currently 1.80%, which means that you would earn $2.80 per share annually. While this may not seem like a lot, it can add up over time. Additionally, as Waste Management continues to grow, the dividend may increase, allowing you to earn even more passive income.

Fourthly, we need to consider the company's commitment to environmental sustainability. Waste Management is a leader in finding environmentally responsible solutions for their customers. They are constantly innovating and finding ways to reduce waste, while also reducing their own environmental impact. As a socially responsible company, they are actively working towards a more sustainable future. This commitment to sustainability is not only good for the environment, but it also makes Waste Management an attractive investment opportunity.

Conclusion:

Investing in Waste Management shares is a great opportunity for anyone looking to invest in a socially responsible company that is committed to finding environmentally responsible solutions. With their intrinsic value estimated at $211 per share and a margin of safety of 25%, the current undervaluation of their shares makes them a great investment option. Additionally, with their commitment to sustainability, they are poised for long-term growth. Once you have invested, by just waiting and being patient, you'll earn an annual passive income from their quarterly dividends. So, if you're looking to diversify your investment portfolio, consider investing in Waste Management today.

Disclosure: we are data scientists, not financial advisors. Please do due diligence when investing.