Why Holding Waste Management Stock Makes Strategic Sense Right Now

Waste Management (WM) has demonstrated solid near-term momentum, posting a 3.7% monthly gain that outpaces the sector’s 1.2% performance. The company carries a Growth Score of B, indicating balanced and sustainable expansion potential. However, before deciding whether to hold or accumulate, it’s worth examining both the compelling reasons and the headwinds.

The Liquidity Question: A Speed Bump Worth Noting

First, let’s address the elephant in the room. WM reported a current ratio of 0.84 last quarter, sitting below the industry median of 0.98. A current ratio under 1.0 traditionally signals potential strain in meeting short-term financial obligations—though for stable, cash-generative businesses like waste management, this warrants context rather than panic. Still, it’s a metric to monitor going forward.

Why the Long-Term Case Remains Intact

Despite that concern, Waste Management’s structural advantages tell a different story. The company operates an extensive network spanning landfills, recycling facilities, and waste-to-energy plants. This integrated infrastructure creates durable competitive moats while positioning WM as the go-to partner for municipalities and enterprises seeking end-to-end waste solutions.

The company’s dynamic pricing model deserves attention. WM has mastered the balance between raising rates for better service quality and maintaining customer retention—a delicate dance that translates into pricing power and margin expansion.

The Dividend Story That Keeps Paying Off

Here’s what truly separates WM from many peers: its dividend track record. The company has paid uninterrupted dividends since 1998, with distributions climbing from $970 million (2021) to $1.21 billion (2024). For buy-and-hold investors, this consistent capital return—paired with an aging demographic requiring more disposal services—creates a compelling total return proposition.

Healthcare Services: A Growth Engine Ahead

The Stericycle integration represents a forward-looking bet. As populations age and birth rates decline across developed markets, medical waste disposal and healthcare logistics demand will intensify. WM is positioning itself to capture this tailwind, turning a mature waste collection business into a more diversified service provider.

The Current Rank & Broader Context

Zacks assigns WM a #3 (Hold) rank, suggesting the upside may be limited in the near term but the downside risks are contained. For comparison, the business services sector offers alternatives with higher growth expectations. Genpact (G) earned a #2 (Buy) ranking with 9.6% long-term earnings growth and 5.5% average earnings surprise. Palantir Technologies (PLTR) also carries a #2 rank but with 50% long-term growth expectations and a 16.3% average earnings beat—though with considerably higher volatility.

The Verdict: Hold, But Understand the Trade-off

Waste Management merits retention for patient, income-focused investors comfortable with mid-single-digit annual returns powered by dividends and modest price appreciation. The current ratio weakness isn’t a dealbreaker given the business’s cash generation, but it does cap near-term upside enthusiasm. If you’re seeking faster growth or are risk-averse about the liquidity position, the higher-ranked alternatives in the sector warrant comparison. For everyone else, WM remains a stable, dividend-backed holding in an essential industry.