Waste Management controls a dense network of collection routes, landfills and transfer stations. This generates recurring revenue and solid margins. The Stericycle acquisition expands the business, but also increases capital tied up and debt. At USD 218.92, the stock already prices in part of this stability.
1. Quick overview
The market value of WM rests on infrastructure, permits and recurring contracts. The current valuation assumes that margins, cash flow and debt continue to move in the desired direction after the Stericycle acquisition.
| Metric | Value |
|---|---|
| Name | Waste Management, Inc. |
| Ticker | WM |
| WKN | 893579 |
| ISIN | US94106L1098 |
| Country | USA |
| Sector | Industrials |
| Industry | Environmental & Facilities Services |
| Market capitalisation | approx. USD 87.51 billion |
| Dividend yield | 1.73% annualised |
| P/E ratio (TTM) | 30.97 |
| P/S ratio (TTM) | 3.41 |
The market data refer to the closing price on 31 August 2026. The current annual dividend is USD 3.78. The P/E and P/S ratios are based on TTM data and cannot be directly equated with the financial-year figures through 2025.
2. Company profile
2.1 History & founding
The roots of Waste Management go back to 1968. The current listed parent company was founded as USA Waste Services in 1987. Following a merger in 1998, the group was renamed Waste Management.
The company’s history explains part of its current competitive advantage. Landfills, permits, vehicles, transfer stations and regional collection routes cannot be replicated quickly. The value lies less in a stock-market story than in infrastructure built over decades.
2.2 Business model
WM collects, transports, sorts and disposes of waste for private households, businesses, municipalities and industrial customers. The company operates 257 landfills and 342 transfer stations, although the stations added through the Stericycle acquisition are not included in this figure.
Collection and Disposal activities form the economic centre. They are complemented by recycling, landfill gas for energy generation, and regulated waste and compliance services. Stericycle, acquired in 2024, expands the offering to include medical and pharmaceutical waste as well as the secure destruction of confidential information.
In 2025 around USD 15.4 billion came from Collection, USD 3.8 billion from Landfill, USD 1.5 billion from Transfer and USD 2.5 billion from Healthcare Solutions. The 2025 revenue jump was therefore partly acquisition-driven and not entirely organic growth.
2.3 Industry & segments (GICS)
Under GICS, Waste Management belongs to the Industrials sector, the Commercial & Professional Services industry group, the Commercial Services & Supplies industry and the Environmental & Facilities Services sub-industry.
The business model is less cyclical than many other industrial services. Waste is generated even when the economy is weaker and still has to be disposed of. Nevertheless, volumes, pricing, labour costs, recycling prices, environmental regulations and permits remain important factors.
3. Historical share-price performance
The WM stock has moved steadily upward over several years. The closing price rose from USD 108.11 at the end of 2020 to USD 155.48 at the end of 2021. A decline to USD 148.49 followed in 2022. The stock then rose to USD 172.54 at the end of 2023, USD 197.19 at the end of 2024 and USD 217.90 at the end of 2025. Excluding dividends, the price therefore roughly doubled between the end of 2020 and the end of 2025.
In 2026, the stock reached a then-record closing price of USD 244.47 on 9 March. At the end of August, the price was USD 218.92, around 10.4% below that level. The 52-week range most recently ran from USD 194.11 to USD 248.13. The picture is therefore shaped more by a revaluation after a strong price phase than by a fundamental collapse.
The latest financial figures support the operational development. In the first half of 2026, revenue rose from USD 12.45 billion to USD 12.91 billion compared with the prior-year period. Diluted earnings per share increased from USD 3.37 to USD 3.74. Operating cash flow rose from USD 2.75 billion to USD 3.23 billion. This improvement helps the stock, but does not automatically remove its high valuation.
Waste Management USD
Interactive price history chart for Waste Management USD (USD).
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4. Fundamental analysis
The historical figures combine steady revenue growth with higher margins. At the same time, 2025 shows that acquisitions, interest costs and investments can slow the development.
4.1 Earnings development – last five financial years
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | USD 17.93 billion | USD 19.70 billion | USD 20.43 billion | USD 22.06 billion | USD 25.20 billion |
| Revenue growth | 17.8% | 9.9% | 3.7% | 8.0% | 14.2% |
| EBIT | USD 2.96 billion | USD 3.43 billion | USD 3.82 billion | USD 4.15 billion | USD 4.61 billion |
| EBIT margin | 16.5% | 17.4% | 18.7% | 18.8% | 18.3% |
| Net income | USD 1.82 billion | USD 2.24 billion | USD 2.30 billion | USD 2.75 billion | USD 2.71 billion |
| Net margin | 10.1% | 11.4% | 11.3% | 12.4% | 10.7% |
| Diluted EPS | USD 4.30 | USD 5.26 | USD 5.66 | USD 6.81 | USD 6.70 |
| Free cash flow* | USD 2.43 billion | USD 1.95 billion | USD 1.82 billion | USD 2.16 billion | USD 2.82 billion |
| Dividend yield | 1.49% | 1.71% | 1.63% | 1.53% | 1.52% |
Revenue rose from USD 17.93 billion to USD 25.20 billion. That corresponds to annual growth of around 8.9%. The strong jump in 2025 includes Stericycle’s contribution. The table therefore shows the growth of the group, not the same organic growth rate.
The EBIT margin improved from 16.5% in 2021 to 18.3% in 2025. This points to pricing power and economies of scale. Net income has developed less smoothly recently: despite higher revenue, it fell from USD 2.75 billion to USD 2.71 billion in 2025. Net interest expense increased from USD 598 million to USD 912 million. This also reduced earnings per share.
Free cash flow, as traceable from the cash-flow statement, remained positive every year. In 2025, USD 2.82 billion stood against net income of USD 2.71 billion and dividend payments of USD 1.33 billion. The dividend was therefore covered by ongoing operations. Cash flow is robust, but the capital intensity of the business remains visible.
For private investors, this means that cash flow can support the dividend, but it does not replace a look at capital requirements and debt.
Revenue and Net Income
Show data table
| Period | Revenue (bn USD) | Net Income (bn USD) |
|---|---|---|
| FY 2019 | 15.46 | 1.67 |
| FY 2020 | 15.22 | 1.50 |
| FY 2021 | 17.93 | 1.82 |
| FY 2022 | 19.70 | 2.24 |
| FY 2023 | 20.43 | 2.30 |
| FY 2024 | 22.06 | 2.75 |
| FY 2025 | 25.20 | 2.71 |
4.2 Balance-sheet quality and returns on capital – last five financial years
The balance sheet is part of WM’s business model. Landfills, vehicles and transfer stations create the competitive advantage, but tie up capital permanently.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Total assets | USD 29.10 billion | USD 31.37 billion | USD 32.82 billion | USD 44.57 billion | USD 45.84 billion |
| Cash and cash equivalents | USD 0.12 billion | USD 0.35 billion | USD 0.46 billion | USD 0.41 billion | USD 0.20 billion |
| Total current assets | USD 3.07 billion | USD 3.27 billion | USD 3.80 billion | USD 4.77 billion | USD 4.91 billion |
| Long-term debt | USD 12.70 billion | USD 14.57 billion | USD 15.90 billion | USD 22.54 billion | USD 22.20 billion |
| Total equity | USD 7.13 billion | USD 6.86 billion | USD 6.90 billion | USD 8.25 billion | USD 9.99 billion |
Total assets grew from USD 29.10 billion to USD 45.84 billion. Property, plant and equipment increased from USD 14.42 billion to USD 20.38 billion over the same period. Goodwill and intangible assets also increased significantly. The 2024 jump is connected with the Stericycle acquisition.
Long-term debt stood at USD 22.20 billion in 2025, while cash and cash equivalents amounted to only USD 201 million. The current ratio was below 1 in every year under review. Ongoing cash flows support the financing, but there is no large liquidity reserve.
Balance-sheet quality therefore depends on what the tied-up capital earns. The next table sets returns and liquidity side by side.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| ROE (adj.) | 22.5% | 31.7% | 29.8% | 32.2% | 24.1% |
| ROA (adj.) | 5.5% | 6.9% | 6.3% | 6.0% | 5.3% |
| ROIC | 10.0% | 11.9% | 11.0% | 9.8% | 9.1% |
| Current ratio | 0.75 | 0.74 | 0.90 | 0.76 | 0.89 |
| Net debt/EBITDA | 2.68 | 2.68 | 2.68 | 3.66 | 3.04 |
The adjusted ROE of 24.1% remains high, but is well below the 2024 figure of 32.2%. ROIC also fell from 9.8% to 9.1%. The high ROE is additionally amplified by the relatively small equity base and the share of debt financing. ROIC therefore provides a better view of operating capital productivity.
Debt is manageable, but not conservative. Net debt/EBITDA was 3.04 in 2025, after rising to 3.66 in 2024. As of 30 June 2026, debt of USD 23.36 billion was set against cash and cash equivalents of USD 557 million. Reducing net debt therefore remains an important part of capital allocation.
For private investors, this means that the balance sheet is sustainable, but higher interest rates or integration problems would leave little liquidity headroom.
4.3 Dividend and payout policy – last five financial years
WM is not a high-dividend stock. The distribution is growing steadily, but remains moderate relative to earnings.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Dividend per share | USD 2.31 | USD 2.55 | USD 2.81 | USD 3.01 | USD 3.31 |
| Payout ratio | 53.4% | 48.1% | 49.3% | 44.1% | 49.3% |
Dividend per share rose by around 43% between 2021 and 2025. The payout ratio remained between 44% and 53%. For 2026, the quarterly dividend was increased from USD 0.825 to USD 0.945. This corresponds to an increase of 14.5% and the 23rd year of dividend increases.
At an annualised dividend of USD 3.78 and a share price of USD 218.92, the yield is 1.73%. The dividend is covered by ongoing cash flow, but has to compete with investments, debt repayment and potential share buybacks.
For private investors, this means that the distribution is predictable, but the current yield is not a main argument for buying the stock.
5. Valuation analysis
At USD 218.92 per share and a market capitalisation of around USD 87.51 billion, WM is valued as a defensive growth stock within the industrial sector.
| Metric | Value |
|---|---|
| P/E ratio (TTM) | 30.97 |
| Forward P/E ratio | 25.65 |
| P/S ratio (TTM) | 3.41 |
| EV/Sales | 4.30 |
| ROE (current) | 29.84% |
| Dividend per share (last completed financial year) | USD 3.31 |
A P/E ratio of 30.97 and a forward P/E ratio of 25.65 require further earnings growth. The P/S ratio of 3.41 and EV/Sales ratio of 4.30 confirm that the market does not value WM like an ordinary industrial services provider. The enterprise value of around USD 110.30 billion is well above the market capitalisation because net debt accounts for a large share of it.
Operational quality can justify a premium. WM has recurring demand, a hard-to-copy asset network and current TTM returns that are above the 2025 annual figures. The 2026 half-year figures also show rising earnings and improved cash flow.
The valuation gap becomes smaller, however, once the acquisition and financing costs are taken into account. The 2025 revenue jump was not entirely organic, net income declined slightly and ROIC fell. The margin of safety therefore does not lie in a low multiple. It would have to come from further earnings growth and falling net debt.
In practical terms, the share price needs sustained earnings growth so that today’s premium does not become a drag on returns.
6. Opportunities and risks
6.1 Opportunities
- With landfills, permits, transfer stations and regional route density, WM has an infrastructure network that is difficult to replicate.
- Recurring disposal volumes and long-term customer relationships support revenue and margins even in a weaker economic environment.
- Healthcare Solutions expands the business into medical waste, compliance services and secure information destruction.
- Recycling and landfill gas provide additional sources of revenue from the existing asset network.
- Rising earnings and cash flows could create more room for dividends and share buybacks again after deleveraging.
6.2 Risks
- P/E, P/S and EV/Sales leave only limited room for operational disappointments.
- Net debt and higher interest costs weigh on financial flexibility.
- Part of the 2025 revenue growth came from the Stericycle acquisition rather than the existing business.
- Landfills, vehicles and recycling facilities require substantial ongoing investment and are exposed to environmental and permitting risks.
- The planned CEO change on 4 January 2027 puts operational continuity and capital allocation under scrutiny.
7. Conclusion and assessment
Waste Management has a robust business model with recurring demand, high infrastructure intensity and solid returns on capital. The figures show rising revenue and margins, but also the cost of the Stericycle acquisition and the associated debt.
The latest half-year figures for 2026 improve the picture: revenue, earnings per share and operating cash flow increased. The dividend is sustainable and growing. However, the free cash flow derived from the cash-flow statement is significantly lower than the separate DERIVED series.
At USD 218.92, a P/E ratio of 30.97 and an EV/Sales ratio of 4.30, WM is more a defensive quality stock with a premium price than a cheap cash-flow stock. Further upside depends on earnings growth, successful integration and lower debt.
This analysis is intended solely for editorial information purposes and does not constitute investment advice, a recommendation to buy or an invitation to trade securities. Despite careful preparation, no guarantee can be given as to the timeliness, completeness or accuracy of the information. In particular, market-related metrics such as market capitalisation, dividend yield, P/E, P/S or EV/Sales should be verified again with up-to-date data before an investment decision.
Note: This analysis is for informational purposes only and does not constitute investment advice. Investing in stocks involves risks.
