Investing in undervalued shares with sturdy underlying fundamentals will let you constantly generate inflation-beating returns over time. Nevertheless, it’s important to establish high quality firms which are a part of increasing addressable markets, which permits them to develop income and earnings constantly.

One such TSX inventory is Waste Connections (TSX:WCN). Valued at a market cap of US$43 billion, Waste Connections gives non-hazardous waste assortment, switch, disposal, and recycling providers throughout the US and Canada. It serves residential, business, municipal, and industrial clients, operates landfills and switch stations, and gives specialised waste therapy for oil and gasoline exploration.

The TSX inventory has returned greater than 500% to shareholders over the previous decade, in dividend-adjusted good points. Regardless of these outsized returns, WCN inventory is down virtually 17% from its all-time highs, providing you with an opportunity to purchase the dip.

Is that this TSX inventory purchase proper now?

Waste Connections delivered third-quarter outcomes that exceeded expectations, which showcases the sturdiness of its stable waste enterprise mannequin amid ongoing financial headwinds.

The corporate reported adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) margins of 33.8%, reflecting underlying stable waste margin growth of roughly 80 foundation factors even because it navigated incremental commodity pressures.

Income grew 5.1% 12 months over 12 months to US$2.46 billion, pushed by sturdy pricing execution of 6.3% in core stable waste providers. Administration raised its full-year pricing steering to roughly 6.5%, up from its preliminary expectations of 6%, citing improved retention pushed by new knowledge analytics instruments.

Volumes declined 2.7% in the course of the quarter, much like second-quarter traits, primarily reflecting deliberate shedding of low-margin contracts and continued weak spot in construction-related exercise.

Waste Connections deployed new synthetic intelligence and knowledge analytics platforms which are already exhibiting compelling outcomes. The pricing optimization software, rolled out to roughly one-seventh of firm areas, has achieved 30% to 40% reductions in buyer churn whereas sustaining comparable worth will increase.

Administration expects to develop this expertise to half or three-quarters of operations all through 2026, positioning the corporate for continued margin good points.

Acquisition exercise remained sturdy, with roughly US$300 million in annualized income both closed or beneath a definitive settlement year-to-date. Notable wins included two of Florida’s largest personal waste firms, demonstrating the corporate’s potential to execute strategic consolidation in engaging markets.

Looking forward to 2026, administration supplied preliminary steering for mid-single-digit income progress, pushed by price-led natural progress and roughly 1% from acquisition carryover.

What’s the WCN inventory worth goal?

Analysts monitoring the TSX inventory forecast income to extend from US$8.92 billion in 2024 to US$12.63 billion in 2029. On this interval, adjusted earnings are projected to develop from US$4.79 per share to US$8.24 per share. Additional, its free money movement is anticipated to enhance from US$1.22 billion in 2024 to US$2.26 billion in 2029.

Waste Connections has elevated its annual dividend per share from US$0.41 in 2016 to US$1.17 in 2024. This payout is anticipated to extend to US$1.29 this 12 months and to US$2.43 in 2029.

Not too long ago, the corporate board approved an 11.1% dividend improve, marking the fifteenth consecutive 12 months of double-digit progress since initiating the dividend in 2010. With an annual dividend expense of roughly US$330 million, WCN’s payout ratio is lower than 30%, which is kind of sustainable.

In October 2025, WCN inventory trades at 30 occasions ahead FCF, which is decrease than its five-year common of 32.4 occasions. If the inventory is priced at 27 occasions ahead FCF, it might return near 40% inside the subsequent three years. Given consensus estimates, the TSX dividend inventory trades at a 22% low cost in October 2025.