Waste Management, Inc. (WM)

Secular Growth Series #1

Hello fellow Dividenders!

Since early February I have been working on this research paper, right after the 2024 financial results were published by the company in late January.

This will be the fist paper of the Secular Trend Series where I will be deep diving in some of the best companies placed to benefit of these mid-long term structural tail winds. We will start with waste management industry with…Waste Management.

Introduction 🎯

Waste Management, Inc. (WM) is the largest integrated waste management company in North America. It's a business that might not sound glamorous, but it's essential and, importantly for us, can be quite profitable. WM provides collection, transfer, recycling, and disposal services to millions of residential, commercial, industrial, and municipal customers. For dividend investors, WM offers a compelling combination of stability, essential services, and a history of consistent dividend growth. A potential red flag is the relatively high debt levels, which we'll dig into later.

Sector Overview 🏭

Waste Management operates in the waste management and environmental services sector. This industry is characterised by high barriers to entry due to significant capital investment in infrastructure (landfills, trucks, recycling facilities), regulatory hurdles, and the need for specialised expertise. Companies in this sector make money by collecting, processing, and disposing of waste, as well as through recycling and resource recovery efforts. Key industry trends include increasing focus on sustainability and recycling, stricter environmental regulations, and the adoption of new technologies to improve efficiency and reduce environmental impact. Challenges include fluctuating commodity prices for recycled materials, managing landfill capacity, and adapting to evolving waste streams.

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Company Overview 🏢

Waste Management's roots trace back to 1893 with a single garbage collection operation in Chicago. Through a series of acquisitions and organic growth, the company expanded its operations and became a publicly traded company in 1971. Today, WM has a vast network of operations across North America, including hundreds of landfills, transfer stations, recycling facilities, and collection routes. Its core business involves collecting waste from customers, transporting it to its facilities, and either disposing of it in landfills or processing it for recycling or resource recovery.

WM, Investor Presentation