Josh Brown Likes This Trash and Recycling Management Giant That's Within Striking Distance of a Record

Why It Matters

The turnaround translates into higher cash returns for shareholders and positions WM as a rare defensive, high‑margin asset in a capital‑intensive industry. Its ESG‑linked waste‑to‑energy initiatives also align with broader sustainability trends.

Key Takeaways

• $11.6B capex invested 2022‑2025, now yielding cash
• Stericycle acquisition adds $2B revenue, 16% margin
• 2026 forecast: 29% free‑cash‑flow growth
• Dividend increased 20+ years, attractive yield
• Stock poised to break $240 resistance

Pulse Analysis

Waste Management’s scale and regulated franchise give it a defensive edge rarely seen in industrial equities. With more than $20 billion in annual revenue and a dividend streak exceeding 20 years, the firm provides predictable cash flow that appeals to income‑focused investors. The Bill & Melinda Gates Foundation’s 7% stake highlights confidence in WM’s long‑term resilience, especially as new landfill permits become scarce across the United States.

The company’s recent $11.6 billion capital deployment marks a strategic shift from growth to harvest. The $7.5 billion Stericycle purchase unlocked a $2 billion healthcare‑waste segment delivering 16% margins, while $1.8 billion funded landfill‑gas‑to‑energy plants and $1.2 billion modernized recycling facilities with robotics and AI. As capex contracts from $950 million to $200 million by 2026, free cash flow is projected to surge 29% year‑over‑year, creating a sizable payout pool for dividends and share buybacks.

From a market perspective, WM is consolidating above its 50‑day and 200‑day moving averages, with the $238‑$240 range acting as a pivotal breakout zone. A decisive breach could push the stock toward new highs, rewarding investors who entered during the recent pullback. Moreover, WM’s renewable natural gas output and automated recycling network enhance its ESG profile, attracting sustainability‑oriented capital while reinforcing its position as a cash‑generating, low‑obsolescence industrial leader.