Financial Survey: Pentair (NYSE:PNR) versus Waste Management (NYSE:WM)

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

Insider and Institutional Ownership

80.4% of Waste Management shares are held by institutional investors. Comparatively, 92.4% of Pentair shares are held by institutional investors. 0.2% of Waste Management shares are held by company insiders. Comparatively, 1.1% of Pentair shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Waste Management pays an annual dividend of $3.30 per share and has a dividend yield of 1.5%. Pentair pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Waste Management pays out 52.0% of its earnings in the form of a dividend. Pentair pays out 25.4% 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. Waste Management has raised its dividend for 22 consecutive years and Pentair has raised its dividend for 7 consecutive years. Waste Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Waste Management has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Pentair has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Valuation and Earnings

This table compares Waste Management and Pentair”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waste Management	$22.06 billion	3.94	$2.75 billion	$6.35	34.02
Pentair	$4.08 billion	4.01	$625.40 million	$3.94	25.39

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

Profitability

This table compares Waste Management and Pentair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waste Management	10.35%	33.00%	6.52%
Pentair	15.84%	21.83%	12.10%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Waste Management and Pentair, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Management	0	10	17	3	2.77
Pentair	4	3	11	2	2.55

Waste Management presently has a consensus target price of $249.18, suggesting a potential upside of 15.34%. Pentair has a consensus target price of $116.31, suggesting a potential upside of 16.28%. Given Pentair’s higher possible upside, analysts clearly believe Pentair is more favorable than Waste Management.

Summary

Waste Management beats Pentair on 10 of the 18 factors compared between the two stocks.

About Waste Management

Waste Management, Inc., through its subsidiaries, engages in the provision of environmental solutions to residential, commercial, industrial, and municipal customers in the United States and Canada. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns and operates transfer stations, as well as owns, develops, and operates landfill facilities that produce landfill gas used as renewable natural gas for generating electricity. As of December 31, 2022, the company owned or operated 254 solid waste landfills, five secure hazardous waste landfills, 97 MRFs, and 337 transfer stations. It also provides materials processing and commodities recycling services at its MRFs, where cardboard, paper, glass, metals, plastics, construction and demolition materials, and other recycling commodities are recovered for resale or redirected for other purposes; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.

About Pentair

Pentair plc provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool. The Flow segment designs, manufactures, and sells fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles for fluid delivery, ion exchange, desalination, food and beverage, separation technologies in the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation, and crop spray in residential, commercial, and industrial markets. The Water Solutions segment provides commercial and residential water treatment products and systems, including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems, as well as installation and preventative services for use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as commercial total water management and filtration in foodservice operations. The Pool segment provides residential and commercial pool equipment and accessories comprising pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for applications in residential and commercial pool maintenance, pool repair, renovation, service, and construction and aquaculture solutions. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.