7 Most Profitable Canadian Stocks To Invest In

2. Waste Connections (NYSE:WCN)  

TTM Net Income: $861 Million  

5-Year Net Income CAGR: 9.08%  

Number of Hedge Fund Holders: 50  

Waste Connections (NYSE:WCN) is a leading Canadian waste services company that offers a comprehensive range of solid waste collection, transfer, disposal, and recycling services across the United States and Canada. The company’s decentralized business model has high margins and has enabled the company to establish a strong presence in both residential and commercial markets.

In Q2, Waste Connections (NYSE:WCN) delivered impressive financial results, with revenue growth of 11% and a 16.4% increase in EBITDA. The company’s growth momentum is driven by its robust pricing power and a strong pipeline of merger and acquisition opportunities. Waste Connections (NYSE:WCN) has successfully exited low-margin contracts, which resulted in a more favorable margin profile and reduced volume growth. Waste Connections’ (NYSE:WCN) M&A strategy, focused on small tuck-in deals, has yielded significant cost and revenue synergies,

The company spent $1.5 billion on acquisitions this year, despite its active M&A program, Waste Connections (NYSE:WCN) maintains a solid balance sheet, with a manageable debt leverage ratio of 2.67x and ample capital for future acquisitions, share repurchases, and dividend payments. The company’s disciplined pricing approach and focus on contract renewals and new contracts are expected to drive pricing growth.

Waste Connections’ (NYSE:WCN) net income has grown at a CAGR of 9.08% over the past 5 years, reaching $861 million in TTM net income as of June 30. Analysts forecast that Waste Connections’ (NYSE:WCN) revenue will grow at a compound annual rate of 10.5%, with an operating margin of 22.8% by the fiscal year 2033, driven by the company’s strong fundamentals and growth drivers. TimesSquare Capital stated the following regarding Waste Connections, Inc. (NYSE:WCN) in its first quarter 2024 investor letter:

“Many of our Industrials positions provide necessary business-to-business operational services, highly technical components, automation & efficiency improvements, or essential infrastructure services. Adding value to the strategy was Waste Connections, Inc. (NYSE:WCN), which collects, transfers, recycles, and disposes of waste for municipalities and businesses in the U.S. and Canada. Revenues and earnings topped expectations, as did management’s initial guidance for 2024. The company projects near-term growth in volumes and pricing, which recent acquisitions should make more than likely. As Waste Connection’s shares climbed 15%, we trimmed our holdings.”