Waste Connection: Disciplined Compounding In North American Waste Infrastructure

2025-11-04 10:20:33 ET

Investment Thesis

I rated Waste Connections ( WCN ) a disciplined compounder on September 18th , and Q3 print only deepened this opinion. Pricing is offsetting inflation, while route density is improving volume resilience. Municipal collection is still the cash floor. Specialty waste and E&P are used for torque. Free cash flow conversion north of 50% provides the company with a rare optionality fund tuck-ins, buybacks, while maintaining a clean balance sheet. At a forward EV/EBITDA of ~17.7x, WCN is trading slightly below its five-year average valuation and still has a bit of upside potential in the stock, as FCF per share compounds. To me, WCN is not a rerating story; it's a compounding one: consistent execution, disciplined capital allocation, and pricing power make WCN one of the cleanest ways to own durable North American infrastructure cash flow in the medium term....

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