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Waste Companies: Good Numbers but Overvalued

TSX:WCN   WASTE CONNECTIONS INC
There has been a lot of talk about Waste companies over the last little while, namely: Waste Connections, Waste Management and Republic Services (the 3 majors for Canada/USA respectively).

While a low beta is certainly attractive as we continue to push this market further up and up, it is important to note that in corrections and recessions, waste companies still lose 30-40% of their stock numerical value, despite what people may "think". Whenever one decides to prepare for a correction or recession, it is best to invest in precious metals and equities and stocks that have a reputation for maintaining and increasing dividends - particularly in the utility sector.

While attractive as stated because of a low beta, currently they all trade 40-45x earnings which for a sector with virtually no speculation is an absurd value.

Where is the buy in level? In my opinion a fairer intrinsic value is around $109-112, however, these stocks should be treated for portfolio stability, rather than for capital appreciation.

- zSplit

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