Financial Contrast: Waste Management (WM) and Tetra Tech (NASDAQ:TTEK)
Waste Management (NYSE: WM) and Tetra Tech (NASDAQ:TTEK) are both mid-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Volatility and Risk
Waste Management has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Tetra Tech has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.
Valuation & Earnings
This table compares Waste Management and Tetra Tech’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Waste Management||$14.13 billion||2.32||$3.86 billion||$2.91||25.64|
|Tetra Tech||$2.03 billion||1.16||$216.70 million||$1.97||21.22|
Waste Management has higher revenue and earnings than Tetra Tech. Tetra Tech is trading at a lower price-to-earnings ratio than Waste Management, indicating that it is currently the more affordable of the two stocks.
Waste Management pays an annual dividend of $1.70 per share and has a dividend yield of 2.3%. Tetra Tech pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Waste Management pays out 58.4% of its earnings in the form of a dividend. Tetra Tech pays out 20.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tetra Tech has increased its dividend for 13 consecutive years.
Institutional and Insider Ownership
75.6% of Waste Management shares are held by institutional investors. Comparatively, 85.0% of Tetra Tech shares are held by institutional investors. 0.2% of Waste Management shares are held by company insiders. Comparatively, 3.8% of Tetra Tech shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Waste Management and Tetra Tech’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for Waste Management and Tetra Tech, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Waste Management presently has a consensus target price of $75.00, indicating a potential upside of 0.52%. Tetra Tech has a consensus target price of $49.57, indicating a potential upside of 18.59%. Given Tetra Tech’s stronger consensus rating and higher probable upside, analysts plainly believe Tetra Tech is more favorable than Waste Management.
Waste Management beats Tetra Tech on 9 of the 17 factors compared between the two stocks.
Waste Management Company Profile
Waste Management, Inc. (WM) is a holding company. The Company, through its subsidiaries, is a provider of waste management environmental services. The Company’s segments include Solid Waste and Other. The Company’s Solid Waste segment includes its solid waste business. The Other segment includes its Strategic Business Solutions (WMSBS) organization; its landfill gas-to-energy operations and third-party subcontract and administration services managed by its Energy and Environmental Services and WM Renewable Energy organizations; its recycling brokerage services, and its service offerings and solutions, such as portable self-storage and long distance moving services, fluorescent lamp recycling and interests it holds in oil and gas producing properties. As of December 31, 2016, the Company owned or operated 243 solid waste landfills and five secure hazardous waste landfills. Its recycling brokerage services involve managing the marketing of recyclable materials for third parties.
Tetra Tech Company Profile
Tetra Tech, Inc. is a provider of consulting, engineering, program management, construction management, and technical services. The Company’s segments include Water, Environment and Infrastructure (WEI), Resource Management and Energy (RME), and Remediation and Construction Management (RCM). The WEI segment provides consulting and engineering services. The RME segment provides consulting and engineering services across the world for a range of resource management and energy needs. The Company includes wind-down of its non-core construction activities in the RCM segment. Its solutions span the entire life cycle of consulting and engineering projects and include applied science, research and technology, engineering, design, construction management, operations and maintenance, and information technology. It provides its services to a diverse base of international, the United States commercial, the United Sates federal clients.
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