Analyzing Veralto (NYSE:VLTO) and Waste Connections (NYSE:WCN)

Veralto (NYSE:VLTO) and Waste Connections (NYSE:WCN) are both large-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Insider & Institutional Ownership

91.3% of Veralto shares are owned by institutional investors. Comparatively, 86.1% of Waste Connections shares are owned by institutional investors. 0.4% of Veralto shares are owned by insiders. Comparatively, 0.3% of Waste Connections shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Veralto and Waste Connections”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veralto	$5.19 billion	4.73	$833.00 million	$3.65	27.08
Waste Connections	$9.35 billion	4.53	$617.57 million	$2.40	69.03

Veralto has higher earnings, but lower revenue than Waste Connections. Veralto is trading at a lower price-to-earnings ratio than Waste Connections, indicating that it is currently the more affordable of the two stocks.

Dividends

Veralto pays an annual dividend of $0.44 per share and has a dividend yield of 0.4%. Waste Connections pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Veralto pays out 12.1% of its earnings in the form of a dividend. Waste Connections pays out 58.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Veralto has raised its dividend for 1 consecutive years and Waste Connections has raised its dividend for 8 consecutive years. Waste Connections is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Veralto and Waste Connections’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veralto	16.75%	38.69%	13.80%
Waste Connections	6.65%	16.07%	6.37%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Veralto and Waste Connections, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veralto	0	4	6	0	2.60
Waste Connections	1	3	13	5	3.00

Veralto currently has a consensus target price of $115.71, indicating a potential upside of 17.05%. Waste Connections has a consensus target price of $210.63, indicating a potential upside of 27.14%. Given Waste Connections’ stronger consensus rating and higher probable upside, analysts plainly believe Waste Connections is more favorable than Veralto.

Risk and Volatility

Veralto has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Waste Connections has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Summary

Veralto beats Waste Connections on 10 of the 18 factors compared between the two stocks.

About Veralto

Veralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications through the Hach, Trojan Technologies, and ChemTreat brands. This segment provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers inline printing solutions for products and packaging with marking and coding systems; marking and coding for packaged goods and related consumables; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; color standard services for the design industry; and a software solution that provides digital asset management, marketing resource management, and product information management. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands to regulated industries, including municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.

About Waste Connections

Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. Waste Connections, Inc. was founded in 1997 and is based in Woodbridge, Canada.