Will the NCIB renewal lead to an increase in earnings per share (EPS) through share count reduction?

Short answer:

Yes – the renewal of Waste Connections’ Normal Course Issuer Bid (NCIB) is expected to raise the company’s earnings‑per‑share (EPS) over time, because the NCIB is a share‑repurchase program that reduces the number of shares outstanding. If the firm’s net income stays roughly the same while the share count falls, the EPS calculation ( EPS = Net Income ÷ Shares Outstanding ) yields a higher figure.

Why a NCIB renewal can lift EPS

How big could the EPS impact be for Waste Connections?

• Scale of the NCIB: The press release does not disclose the specific dollar amount or share‑volume target for the renewed NCIB. Historically, Waste Connections has run NCIBs in the range of a few hundred million CAD per year, representing a modest but meaningful percentage of its total shares outstanding.
  
• Share‑count reduction: If, for example, the NCIB repurchases 2 % of the outstanding shares in a given year, the share count falls by that same proportion. Assuming net income stays flat, EPS would rise by roughly 2 % (ignoring any tax or accounting adjustments).
  
• Earnings stability: Waste Connections is a mature, cash‑generating waste‑management firm. Its earnings are relatively stable, so the dilution‑offset effect of the NCIB is likely to be the dominant driver of EPS change.

Bottom‑line considerations

1. Continuation, not a one‑off: The NCIB renewal signals that the company intends to keep buying back shares on an ongoing basis, not just a single large repurchase. This steady‑state reduction in share count can produce a cumulative EPS lift over several years.
   
2. Magnitude depends on execution: The actual EPS increase will be proportional to how many shares the company actually repurchases each quarter. If the market price is favorable and the company’s cash flow supports the program, the repurchases could be sizable, amplifying the EPS effect.
   
3. No guarantee of immediate EPS rise: Because the NCIB is a program authorization, the EPS will only move upward as the repurchases are carried out. Until the company completes the buy‑backs, the current EPS remains unchanged.
   
4. Potential offsetting factors: If the repurchases are funded by borrowing rather than internal cash, interest expense could modestly depress net income, slightly dampening the EPS boost. However, Waste Connections typically uses operating cash, minimizing this effect.

Take‑away

• Mechanically, a share‑repurchase program like an NCIB reduces the denominator in the EPS calculation, leading to a higher EPS if net income does not fall proportionally.
  
• In Waste Connections’ case, the renewal of the NCIB gives the company a continued pathway to shrink its share base, which, all else equal, will increase EPS over the life of the program.
  
• The magnitude and timing of the EPS uplift will depend on the actual volume of shares repurchased, the price at which they are bought, and the stability of the company’s earnings during the repurchase periods.
  

Thus, based on the information provided, the NCIB renewal is expected to result in an increase in EPS through share‑count reduction, assuming the company follows through with its share‑buy‑back schedule and earnings remain broadly stable.