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Waste Management (WM) Up 7.5% in the Past 6 Months: Here's Why

Shares of Waste Management, Inc. WM have gained 7.5% in the past six months compared with 5.3% rise of the industry it belongs to.

The upside was primarily driven by shareholder-friendly steps and advanced waste collection and recycling techniques.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Reasons for Upside

The waste management industry stands to benefit from the growing adoption of advanced waste collection and recycling techniques. Increasing environmental concerns, rapid industrialization, population explosion and expected increase in non-hazardous waste as a result of rapid economic growth are expected to enhance business opportunities for waste management.

Companies are increasingly undertaking municipal solid waste and non-hazardous industrial waste recycling measures. Furthermore, government initiatives to introduce sustainable waste management mechanisms, reduce greenhouse gas emissions and put a check on illegal dumping are also expected to drive demand.

Waste Management has a dominant market capitalization and a steady dividend as well as share repurchase policy. In 2021, 2020 and 2019, the company had repurchased shares worth $1.35 billion, $402 million and $248 million, respectively. It paid $970 million, $927 million and $876 million as dividends during 2021, 2020 and 2019, respectively. Waste Management plans to return significant cash to shareholders through healthy dividends and share repurchases in the future as well.

Impressive Earnings History

Driven by the above tailwinds, the stock has surpassed its estimates in the past four quarters, the average being 6.5%.

Zacks Rank and Stocks to Consider

Waste Management currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Automatic Data Processing, Inc. ADP and Cross Country Healthcare, Inc. CCRN.

ADP carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.

ADP delivered a trailing four-quarter earnings surprise of 3.5%, on average.

Cross Country Healthcare is currently Zacks #2 Ranked. CCRN has a long-term earnings growth expectation of 6%.

CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.

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