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Is Waste Connections (NYSE:WCN) A Risky Investment?

Is Waste Connections (NYSE:WCN) A Risky Investment?

Waste Connections(纽约证券交易所代码:WCN)是一项风险投资吗?
Simply Wall St ·  05/21 23:00

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We can see that Waste Connections, Inc. (NYSE:WCN) does use debt in its business. But is this debt a concern to shareholders?

霍华德·马克斯说得好,他说的不是担心股价的波动,而是 “永久损失的可能性是我担心的风险... 也是我认识的每位实际投资者所担心的风险。”当我们思考一家公司的风险有多大时,我们总是喜欢考虑其债务的用途,因为债务过载可能导致破产。我们可以看到,Waste Connections, Inc.(纽约证券交易所代码:WCN)确实在其业务中使用了债务。但是这笔债务是股东关心的问题吗?

What Risk Does Debt Bring?

债务会带来什么风险?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

当企业无法通过自由现金流或以诱人的价格筹集资金来轻松履行这些义务时,债务和其他负债就会成为风险。资本主义的组成部分是 “创造性破坏” 过程,在这种过程中,倒闭的企业被银行家无情地清算。但是,更常见(但仍然昂贵)的情况是,公司为了控制债务,必须以低廉的股价稀释股东。当然,债务可以成为企业的重要工具,尤其是资本密集型企业。当我们检查债务水平时,我们首先要同时考虑现金和债务水平。

What Is Waste Connections's Debt?

Waste Connections 的债务是什么?

You can click the graphic below for the historical numbers, but it shows that as of March 2024 Waste Connections had US$7.82b of debt, an increase on US$6.94b, over one year. Net debt is about the same, since the it doesn't have much cash.

你可以点击下图查看历史数字,但它显示,截至2024年3月,Waste Connections在一年内有78.2亿美元的债务,比69.4亿美元有所增加。净负债大致相同,因为它没有太多现金。

debt-equity-history-analysis
NYSE:WCN Debt to Equity History May 21st 2024
纽约证券交易所:WCN债务与股本的比率历史记录 2024年5月21日

How Healthy Is Waste Connections' Balance Sheet?

Waste Connections的资产负债表有多健康?

The latest balance sheet data shows that Waste Connections had liabilities of US$1.63b due within a year, and liabilities of US$9.66b falling due after that. On the other hand, it had cash of US$130.5m and US$896.7m worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$10.3b.

最新的资产负债表数据显示,Waste Connections的负债为16.3亿美元,之后到期的负债为96.6亿美元。另一方面,它有1.305亿美元的现金和价值8.967亿美元的应收账款将在一年内到期。因此,其负债超过其现金和(短期)应收账款总额103亿美元。

Waste Connections has a very large market capitalization of US$43.2b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution.

Waste Connections的市值非常大,为432亿美元,因此,如果有需要,它很可能会筹集资金以改善其资产负债表。但很明显,我们一定要仔细研究它能否在不稀释的情况下管理债务。

In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.

为了扩大公司相对于收益的负债规模,我们计算其净负债除以利息、税项、折旧和摊销前的收益(EBITDA),将其利息和税前收益(EBIT)除以利息支出(利息保障)。这样,我们既考虑债务的绝对数量,也考虑为债务支付的利率。

Waste Connections's debt is 3.2 times its EBITDA, and its EBIT cover its interest expense 5.1 times over. Taken together this implies that, while we wouldn't want to see debt levels rise, we think it can handle its current leverage. We saw Waste Connections grow its EBIT by 5.7% in the last twelve months. Whilst that hardly knocks our socks off it is a positive when it comes to debt. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Waste Connections's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Waste Connections的债务是其息税折旧摊销前利润的3.2倍,其息税前利润支付了利息支出的5.1倍。综上所述,这意味着,尽管我们不希望债务水平上升,但我们认为它可以承受目前的杠杆率。在过去的十二个月中,我们看到Waste Connections的息税前利润增长了5.7%。尽管这几乎无法使我们大吃一惊,但在债务方面却是一个积极因素。资产负债表显然是分析债务时需要关注的领域。但是,未来的收益将决定Waste Connections未来维持健康资产负债表的能力。因此,如果你想看看专业人士的想法,你可能会发现这份关于分析师利润预测的免费报告很有趣。

Finally, a company can only pay off debt with cold hard cash, not accounting profits. So we clearly need to look at whether that EBIT is leading to corresponding free cash flow. During the last three years, Waste Connections generated free cash flow amounting to a very robust 85% of its EBIT, more than we'd expect. That puts it in a very strong position to pay down debt.

最后,公司只能用冷硬现金偿还债务,不能用会计利润偿还债务。因此,我们显然需要研究息税前利润是否会带来相应的自由现金流。在过去三年中,Waste Connections产生的自由现金流相当于其息税前利润的85%,超出了我们的预期。这使其在偿还债务方面处于非常有利的地位。

Our View

我们的观点

Waste Connections's conversion of EBIT to free cash flow suggests it can handle its debt as easily as Cristiano Ronaldo could score a goal against an under 14's goalkeeper. But, on a more sombre note, we are a little concerned by its net debt to EBITDA. All these things considered, it appears that Waste Connections can comfortably handle its current debt levels. On the plus side, this leverage can boost shareholder returns, but the potential downside is more risk of loss, so it's worth monitoring the balance sheet. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. These risks can be hard to spot. Every company has them, and we've spotted 2 warning signs for Waste Connections you should know about.

Waste Connections将息税前利润转换为自由现金流,这表明它可以像克里斯蒂亚诺·罗纳尔多在对阵14岁以下的守门员的比赛中进球一样轻松地处理债务。但是,更悲观的是,我们对其净负债占息税折旧摊销前利润的比例有些担忧。考虑到所有这些因素,Waste Connections似乎可以轻松应对其当前的债务水平。从好的方面来看,这种杠杆作用可以提高股东的回报,但潜在的缺点是损失风险更大,因此值得关注资产负债表。毫无疑问,我们从资产负债表中学到的关于债务的知识最多。但是,并非所有的投资风险都存在于资产负债表中,远非如此。这些风险可能很难发现。每家公司都有它们,我们发现了两个你应该知道的废物连接警告标志。

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

如果你有兴趣投资能够在没有债务负担的情况下增加利润的企业,请查看这份资产负债表上有净现金的成长型企业的免费清单。

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。

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