Stock Analysis on Net

Waste Management Inc. (NYSE:WM)

This company has been moved to the archive! The financial data has not been updated since February 15, 2022.

Enterprise Value to FCFF (EV/FCFF) 

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Free Cash Flow to The Firm (FCFF)

Waste Management Inc., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income attributable to Waste Management, Inc. 1,816 1,496 1,670 1,925 1,949
Net (income) loss attributable to noncontrolling interests 1 1 (2)
Net noncash charges 2,395 2,234 2,123 1,676 1,429
Change in operating assets and liabilities, net of effects of acquisitions and divestitures 126 (327) 80 (29) (198)
Net cash provided by operating activities 4,338 3,403 3,874 3,570 3,180
Interest paid, net of capitalized interest, net of tax1 299 364 315 273 246
Capitalized interest, net of tax2 10 13 17 13 10
Capital expenditures (1,904) (1,632) (1,818) (1,694) (1,509)
Free cash flow to the firm (FCFF) 2,744 2,148 2,388 2,162 1,927

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Waste Management Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Waste Management Inc. FCFF decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Interest Paid, Net of Tax

Waste Management Inc., interest paid, net of tax calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR1 22.62% 20.94% 20.61% 19.55% 35.18%
Interest Paid, Net of Tax
Interest paid, net of capitalized interest, before tax 387 461 397 339 380
Less: Interest paid, net of capitalized interest, tax2 88 97 82 66 134
Interest paid, net of capitalized interest, net of tax 299 364 315 273 246
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax 13 16 21 16 15
Less: Capitalized interest, tax3 3 3 4 3 5
Capitalized interest, net of tax 10 13 17 13 10

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 See details »

2 2021 Calculation
Interest paid, net of capitalized interest, tax = Interest paid, net of capitalized interest × EITR
= 387 × 22.62% = 88

3 2021 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 13 × 22.62% = 3


Enterprise Value to FCFF Ratio, Current

Waste Management Inc., current EV/FCFF calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 72,442
Free cash flow to the firm (FCFF) 2,744
Valuation Ratio
EV/FCFF 26.40
Benchmarks
EV/FCFF, Industry
Industrials 33.59

Based on: 10-K (reporting date: 2021-12-31).

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Waste Management Inc., historical EV/FCFF calculation, comparison to benchmarks

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 72,442 60,043 62,701 51,852 45,929
Free cash flow to the firm (FCFF)2 2,744 2,148 2,388 2,162 1,927
Valuation Ratio
EV/FCFF3 26.40 27.95 26.26 23.99 23.83
Benchmarks
EV/FCFF, Industry
Industrials 28.41 72.49 31.28

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 See details »

2 See details »

3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 72,442 ÷ 2,744 = 26.40

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Waste Management Inc. EV/FCFF ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.