NYSE:WM
WASTE MANAGEMENT INC
A dominant US-based provider of integrated waste services with a robust portfolio of landfills, recycling facilities, and collection contracts.
Key Metrics
Investment Thesis
Bull Case
Investors may favor WM due to its essential utility status and defensive characteristics in a recessionary environment where waste services remain non-discretionary. The company's consistent track record of dividend growth and ability to pass on cost increases through contract adjustments supports long-term value creation. Significant backlog from municipal contracts ensures visibility into future revenue streams, reducing earnings volatility.
Bear Case
Concerns exist regarding the high level of debt relative to equity, with total liabilities at $35.84B against only $9.99B in shareholders' equity. The substantial accumulated retained earnings deficit of $17.23B suggests historical losses or aggressive accounting that warrants scrutiny for future solvency. Intense competition from lower-cost rivals and potential stagnation in organic growth rates could pressure margins over the next decade.
About WASTE MANAGEMENT INC
Waste Management Inc. is a leading global provider of integrated waste services, including trash collection, recycling, landfilling, and hazardous waste management. Operating primarily in the United States with significant international presence, the company serves residential, commercial, and industrial clients while leveraging its massive infrastructure network to provide essential municipal and private sector waste disposal solutions.
Analysis
Management Discussion
WM reported strong operational performance in 2025, generating $25.2B in revenue and maintaining net income near $2.71B despite inflationary headwinds. The company successfully balanced heavy capital investments totaling $3.96B for facility expansion and acquisitions with robust operating cash flows of $6.04B. While financing outflows reached $2.67B, the firm continues to deleverage effectively while returning capital through dividends of $1.33B.
Industry Overview
The waste management industry is characterized by high capital intensity, long-term contracts, and strict environmental regulations that favor established incumbents with scale. As population growth and urbanization increase waste generation globally, demand for disposal and recycling services remains resilient but faces increasing scrutiny on sustainability practices. Consolidation trends continue as larger players acquire smaller operators to achieve economies of scale and regulatory compliance.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $19.70B | $20.43B | $22.06B | $25.20B |
| Cost of Revenue | $12.29B | $12.61B | $13.38B | $15.01B |
| Gross Profit | $7.40B | $7.82B | $8.68B | $10.19B |
| Operating Expenses | $4.04B | $4.25B | $4.62B | $5.88B |
| Operating Income | $3.37B | $3.58B | $4.06B | $4.31B |
| G&A | $1.94B | $1.93B | $2.26B | $2.72B |
| Stock-Based Comp | $84.0M | $93.0M | $118.0M | $169.0M |
| D&A | $2.04B | $2.07B | $2.27B | $2.86B |
| Amortization | $129.0M | $129.0M | $180.0M | $421.0M |
| Other OpEx | $2.10B | $2.32B | $2.35B | $3.16B |
| Non-Operating Income | $-447.0M | $-554.0M | $-605.0M | $-882.0M |
| Pre-Tax Income | $2.92B | $3.02B | $3.46B | $3.43B |
| Income Tax | $678.0M | $745.0M | $713.0M | $717.0M |
| Continuing Ops | $2.24B | $2.28B | $2.75B | $2.71B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $2.24B | $2.28B | $2.75B | $2.71B |
| Minority Interest | $2.0M | $-28.0M | $-1.0M | $1.0M |
| Net to Common | $2.24B | $2.30B | $2.75B | $2.71B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $3.55B | $3.80B | $4.77B | $4.91B |
| Cash & Equivalents | $351.0M | $458.0M | $414.0M | $201.0M |
| Accounts Receivable | $2.46B | $2.63B | $3.27B | $3.44B |
| Other Current Assets | $739.0M | $713.0M | $1.09B | $1.27B |
| Long-Term Assets | $27.82B | $29.02B | $39.79B | $40.92B |
| Intangibles | $827.0M | $759.0M | $4.19B | $3.77B |
| Goodwill | $9.32B | $9.25B | $13.44B | $13.88B |
| Operating Leases | $456.0M | $453.0M | $996.0M | $959.0M |
| Other LT Assets | $16.75B | $18.02B | $21.09B | $22.22B |
| Total Assets | $31.37B | $32.82B | $44.57B | $45.84B |
| Current Liabilities | $4.39B | $4.23B | $6.26B | $5.52B |
| Accounts Payable | $1.77B | $1.71B | $2.05B | $1.87B |
| Current Leases | $64.0M | $66.0M | $162.0M | $165.0M |
| Deferred Revenue | $589.0M | $578.0M | $673.0M | $735.0M |
| Other Current Liab | $350.0M | $268.0M | $1.20B | $546.0M |
| Long-Term Liabilities | $20.11B | $21.70B | $30.05B | $30.32B |
| LT Operating Leases | $460.0M | $452.0M | $878.0M | $845.0M |
| Other LT Liab | $19.65B | $21.25B | $29.18B | $29.48B |
| Total Liabilities | $24.50B | $25.93B | $36.31B | $35.84B |
| Shareholders' Equity | $6.86B | $6.90B | $8.25B | $9.99B |
| Retained Earnings | $13.17B | $14.33B | $15.86B | $17.23B |
| AOCI | $-69.0M | $-37.0M | $-115.0M | $-10.0M |
| Total L&E | $31.37B | $32.82B | $44.57B | $45.84B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $2.24B | $2.28B | $2.75B | $2.71B |
| Non-Cash Adjustments | $1.58B | $2.25B | $2.27B | $2.96B |
| Working Capital Changes | $716.0M | $192.0M | $380.0M | $376.0M |
| Cash from Operations | $4.54B | $4.72B | $5.39B | $6.04B |
| Capital Expenditures | $2.81B | — | — | — |
| Cash from Investing | $-3.06B | $-3.09B | $-10.60B | $-3.57B |
| Share Buybacks | $1.50B | $1.30B | $262.0M | — |
| Dividends Paid | $1.08B | $1.14B | $1.21B | $1.33B |
| Cash from Financing | $-1.22B | $-1.52B | $5.16B | $-2.67B |
| FX Effect | $-6.0M | $3.0M | $-9.0M | $6.0M |
| Net Change in Cash | $251.0M | $107.0M | $-65.0M | $-190.0M |
| Beginning Cash | $194.0M | $445.0M | $552.0M | $487.0M |
| Ending Cash | $445.0M | $552.0M | $487.0M | $297.0M |
Frequently Asked Questions
How does WASTE MANAGEMENT INC make money?
The company's revenue is driven by four main segments: Integrated Waste Services (trash collection and transfer stations), Landfilling (municipal and industrial solid waste disposal), Recycling (processing and marketing recyclable materials), and Other (hazardous waste management and environmental services).
What are the main risks for WM?
Regulatory changes regarding landfill taxes and emissions could significantly impact operating margins in the environmental services sector. Rising labor costs and fuel prices pose ongoing inflationary pressures on a capital-intensive business model with thin margins. Potential over-reliance on municipal contracts exposes the company to political shifts and budget cuts in local government funding.
What is WM's competitive advantage?
WM possesses an extensive proprietary infrastructure network comprising over 2,000 facilities, creating high barriers to entry for competitors. The company benefits from long-term contracts with municipalities that provide stable cash flows and predictable revenue growth. Its diversified service portfolio across different geographic regions mitigates local economic downturns and regulatory changes.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.