- Company name
- Waste Management
- Sector
- Waste collection & disposal
- About
- Waste Management collects trash and recycling from homes and businesses, using trucks and transfer stations to move the waste to its disposal sites. It owns and operates the largest network of landfills in North America. This land is the core of its moat, since a landfill permit takes years to win against local opposition, so a new competitor can rarely open a site nearby. WM also runs one of the largest recycling businesses in North America, sorting and reselling recovered paper, plastic, and metal. It captures methane gas from its landfills and turns it into renewable natural gas, which it sells as vehicle fuel or into the pipeline grid, turning a waste byproduct into a growing source of profit. In November 2024, WM bought Stericycle for $7.2 billion, adding medical waste collection and secure document destruction. This business now runs as the WM Healthcare Solutions segment, using WM's existing routes and disposal network to serve a new, regulated market.
- Thesis
- At $206.83, WM trades about 6% below its $220 fair value. This is not a deep-value situation. It is the kind of modest discount that shows up on a steady, wide-moat compounder that rarely trades far from what it is worth. The case for closing that gap rests on continued execution: adjusted operating EBITDA and free cash flow have grown faster than revenue in every quarter of 2026 so far, margins keep expanding as the Stericycle-based Healthcare Solutions segment matures, and the board keeps returning most of that cash to shareholders, including a 14.5% dividend increase and a new $3 billion buyback authorized for 2026. If that trend holds through the leadership handoff to incoming CEO John Morris in January 2027, the discount can close. The honest counter-case: because WM already trades close to fair value, there is little room for error. Slower progress integrating Healthcare Solutions, weak recycled-commodity prices, or a bumpy CEO transition could just as easily leave the stock near today's price instead.
- Risks
- WM Healthcare Solutions, the segment built from the 2024 Stericycle acquisition, has been running below plan. Softer volumes there were part of why management trimmed 2026 revenue guidance in July 2026, and the roughly $250 million in targeted deal synergies is not yet fully realized.
WM already trades close to its estimated fair value, about a 6% discount. This leaves little room for error. If growth or margins disappoint, the stock has less of a cushion than a more deeply discounted pick would.
Recycling profit depends on prices for paper, plastic, and other recovered materials that WM does not control. Management estimates that a $10-per-ton move in blended recycled-commodity prices changes EBITDA by about $27 million.
WM is going through two senior leadership changes close together. CFO David Reed started in November 2025, and CEO Jim Fish is retiring, with John Morris taking over in January 2027. Two transitions this close together add execution risk.
New state rules on PFAS chemicals in landfills, plus rising fuel and labor costs, could raise WM's operating expenses faster than its pricing can offset them.
- Recent events
- 2026-08-26: Jim Fish announced he will retire as CEO after more than a decade in the role and over 25 years at WM. The board named President John Morris as his successor, effective January 4, 2027.
2026-07-28: WM reported Q2 2026 results. Revenue grew 4.0% to $6.68 billion. Adjusted operating EBITDA grew 5.5% to $2.07 billion, a 30.9% margin. Free cash flow grew 35% to $1.10 billion. Management trimmed full-year revenue guidance slightly, to $26.275-$26.475 billion, on lower volumes, including in WM Healthcare Solutions, but kept its EBITDA and free cash flow guidance unchanged.
2026-01-29: WM reported Q4 and full-year 2025 results. Full-year revenue was $25.2 billion. Full-year adjusted operating EBITDA grew 13.3% to $7.17 billion, its best-ever margin. Management guided 2026 revenue to $26.4-$26.6 billion and free cash flow to $3.75-$3.85 billion.
2025-12-15: WM's board approved a planned 14.5% increase in the 2026 dividend rate, to $3.78 per share per year, the 23rd straight year of increases, and a new $3 billion share buyback authorization, replacing the prior $1.5 billion program.
2025-11-01: David Reed became WM's Chief Financial Officer, succeeding Devina Rankin, who retired after nearly 23 years at the company.