Is Waste Management, Inc. (WM) A Good Stock To Buy?

We came across a thesis on Waste Management, Inc. on Roche Capital’s Substack by Pedro Ortiz. In this article, we will summarize the bulls’ thesis on WM. Waste Management, Inc.'s share was trading at $243.95 as of March 4th. WM’s trailing and forward P/E were 36.33 and 29.67 respectively according to Yahoo Finance.

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Waste Management, Inc. (WM) is the largest environmental services company in North America, operating an integrated waste management system that captures value across the entire waste value chain. Unlike traditional waste haulers that only collect and transport garbage, WM controls key infrastructure such as landfills, transfer stations, and its vehicle fleet, enabling it to internalize a large portion of the waste it collects.

The company owns roughly 30% of U.S. landfill capacity, operates hundreds of transfer stations, and manages a fleet exceeding 19,000 vehicles, creating a physical and regulatory moat that is extremely difficult for competitors to replicate due to strict landfill permitting and long-term municipal contracts. This vertically integrated structure allows WM to earn revenue at multiple stages of the process—from collection to transfer and final disposal—while benefiting from inflation-linked contracts and strong route density, which reinforces pricing power and operational efficiency.

The company’s operational performance reflects years of disciplined execution. In 2025, WM generated $6.04 billion in operating cash flow and $2.94 billion in free cash flow, representing a 27% year-over-year increase. Efficiency improvements across the business have been driven by better labor retention, fleet modernization, and technology adoption.

Driver turnover declined significantly, improving route productivity and reducing training costs, while newer trucks lowered maintenance expenses and downtime. Investments in automation, AI-powered recycling systems, and IoT-enabled landfill operations have further enhanced operational efficiency, enabling the company to expand margins even while integrating the $7.2 billion acquisition of Stericycle.

WM is also expanding into regulated medical waste through Stericycle, which benefits from strict regulatory requirements and long-term healthcare contracts, offering attractive margin expansion opportunities as integration improves. At the same time, the company is investing $3 billion in renewable natural gas and advanced recycling facilities, which are expected to generate long-term recurring cash flow.

With management projecting approximately $3.8 billion in free cash flow by 2026 and returning up to 90% of it to shareholders through dividends and buybacks, Waste Management represents a high-quality cash flow compounder supported by durable infrastructure assets, regulatory barriers, and long-term growth opportunities in sustainability and environmental services.

Previously, we covered a 

 on Waste Management, Inc. (WM) by Francesco Ferrari in April 2025, which highlighted the company’s strong long-term returns, low volatility profile, and consistent profitability. WM’s stock price has appreciated by approximately 5.65% since our coverage. Pedro Ortiz shares a similar view but emphasizes on WM’s vertically integrated infrastructure, regulatory moat, and free cash flow growth driven by operational efficiency.

Waste Management, Inc. is not on our list of the 

. As per our database, 65 hedge fund portfolios held WM at the end of the fourth quarter which was 62 in the previous quarter. While we acknowledge the risk and potential of WM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WM and that has 10,000% upside potential, check out our report about this  cheapest AI stock

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