GFL Environmental Inc. (NYSE: GFL)

Sector: Industrials Industry: Waste Management CIK: 0001780232
Market Cap 16.21 Bn
P/B 3.04
P/E 5.79
P/S 3.36
ROIC (Qtr) 74.38
Div Yield % 0.07
Rev 1y % (Qtr) 12.82
Total Debt (Qtr) 5.79 Bn
Debt/Equity (Qtr) 1.09
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About

Investment thesis

Bull case

  • Tangible assets of 7.77B provide robust 214.15x coverage of other current liabilities 36.28M, indicating strong asset backing.
  • Operating cash flow of 960.58M provides solid 0.66x coverage of current liabilities 1.46B, showing strong operational health.
  • Retained earnings of 167.52M provide strong 4.62x coverage of other current liabilities 36.28M, indicating earnings quality.
  • Strong cash position of 62.48M provides 1.72x coverage of other current liabilities 36.28M, indicating excellent liquidity.
  • Tangible assets of 7.77B provide robust 5.33x coverage of current liabilities 1.46B, showing strong asset backing.

Bear case

  • Operating cash flow of 960.58M barely covers its investment activities of 2.89B, with a coverage ratio of 0.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 960.58M provides thin coverage of dividend payments of (22.70M) with a -42.32 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 62.48M provide limited coverage of acquisition spending of 3.68B, which is 0.02x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 960.58M provides minimal -92.68x coverage of tax expenses of (10.36M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 170.07M provides weak coverage of capital expenditures of 790.51M, with a 0.22 ratio suggesting additional external financing needs for growth initiatives.

Segments [axis] Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Waste Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WM Waste Management Inc 94.79 Bn 35.00 3.76 22.91 Bn
2 RSG Republic Services, Inc. 75.14 Bn 112.85 7.74 13.27 Bn
3 WCN Waste Connections, Inc. 41.54 Bn 38.58 4.39 9.15 Bn
4 GFL GFL Environmental Inc. 16.21 Bn 5.79 3.36 5.79 Bn
5 CLH Clean Harbors Inc 14.43 Bn 37.17 2.42 3.02 Bn
6 CWST Casella Waste Systems Inc 6.60 Bn 432.83 3.68 1.23 Bn
7 NVRI ENVIRI Corp 1.52 Bn -9.13 0.68 1.67 Bn
8 MEG Montrose Environmental Group, Inc. 0.71 Bn -25.50 0.86 0.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.13 1.64
EV to Cash from Ops. EV/CFO 16.53 3.23
EV to Debt EV to Debt 2.74 85.65
EV to EBIT EV/EBIT 4.93 8.07
EV to EBITDA EV/EBITDA 11.28 -3.42
EV to Free Cash Flow [EV/FCF] EV/FCF 93.36 8.12
EV to Market Cap EV to Market Cap 0.98 1.86
EV to Revenue EV/Rev 3.29 5.60
Price to Book Value [P/B] P/B 3.04 3.45
Price to Earnings [P/E] P/E 5.79 30.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 89.99 4.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.60 5.62
Dividend per Basic Share Div per Share (Qtr) 0.03 0.35
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 4.76 5.29
Interest Coverage Int. cover (Qtr) 7.42 5.13
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -0.59 14.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -32.76 -1.80
Dividend Growth (1y) % Div 1y % (Qtr) -46.43 -2.49
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2,259.24 243.78
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8.74 341.01
EBIT Growth (1y) % EBIT 1y % (Qtr) 1,738.08 188.84
EBT Growth (1y) % EBT 1y % (Qtr) 523.04 158.00
EPS Growth (1y) % EPS 1y % (Qtr) 610.10 92.91
FCF Growth (1y) % FCF 1y % (Qtr) -40.05 3.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 27.32 16.16
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.25 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.01 0.02
Cash Ratio Cash Ratio (Qtr) 0.04 0.89
Current Ratio Curr Ratio (Qtr) 0.58 1.93
Debt to Equity Ratio Debt/Equity (Qtr) 1.09 0.73
Interest Cover Ratio Int Coverage (Qtr) 7.42 5.13
Times Interest Earned Times Interest Earned (Qtr) 7.42 5.13
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 86.60 -22.04
EBIT Margin % EBIT Margin % (Qtr) 91.43 -33.04
EBT Margin % EBT Margin % (Qtr) 57.74 -37.82
Gross Margin % Gross Margin % (Qtr) 20.70 23.79
Net Profit Margin % Net Margin % (Qtr) 58.00 -39.04