The waste management sector is witnessing a notable shift, with Waste Management, Inc. (WM) emerging as a standout performer. Over the past three months, WM’s shares have climbed 2.6%, bucking the industry’s 1.8% decline. This upward trajectory is underpinned by robust financial projections: fourth-quarter 2025 earnings are expected to surge 14.7% year over year, with revenues anticipated to grow 14.5% in 2025 and 5.4% in 2026.
WM’s growth is not merely a product of market conditions but a result of strategic investments in advanced waste collection, recycling, and disposal infrastructure. The company’s extensive network of landfills, recycling facilities, and waste-to-energy plants ensures sustainable long-term growth. Moreover, the integration of modern technology and process improvements enhances service delivery across various sectors, reinforcing the essential nature of waste management services.
The company’s pricing and cost-control strategy is a testament to its operational efficiency. By aligning price adjustments with service quality and reliability, WM ensures customer satisfaction while protecting margins in fluctuating economic conditions. This strategy, coupled with a consistent dividend payout since 1998, attracts long-term investors seeking steady returns and safety during market fluctuations.
However, WM’s current ratio of 0.84, lower than the industry average of 0.98, raises concerns about its short-term liquidity. This metric suggests that the company may face challenges in meeting immediate obligations, a factor that investors should consider.
In contrast, Zurn Elkay Water Solutions Corporation (ZWS) and Veralto Corporation (VLTO) present compelling alternatives. Both companies carry a Zacks Rank #2 (Buy), with long-term earnings growth expectations of 14% and 8.4%, respectively. Their consistent earnings surprises—10.3% for ZWS and 6.5% for VLTO—highlight their potential for robust performance.
The sector’s dynamics are evolving, with WM’s steady growth and dividend payouts appealing to conservative investors, while ZWS and VLTO offer higher growth potential. This landscape challenges the traditional perception of the waste management sector as stagnant, sparking debate about the role of technology and strategic investments in driving growth.
As the sector grapples with these shifts, one thing is clear: the integration of advanced technologies and sustainable practices is reshaping the industry, offering new opportunities for investors and operators alike. The question remains: how will these trends influence the sector’s development, and what strategies will companies employ to stay ahead?