Here's Why Investors Must Hold WM Stock in Their Portfolios Now

WM WM has had an impressive run over the past year. The company’s shares have jumped 12.9% in that period, outperforming the industry’s 11.6% growth.

WM’s revenues are anticipated to increase 15.9% and 5.4% year over year in 2025 and 2026, respectively. Earnings are estimated to rise 4.8% in 2025 and 12.2% in 2026.

Factors That Augur Well for WM’s Success

The waste management industry is poised to grow from the rising adoption of advanced waste collection and recycling techniques. Heightened environmental concerns, rapid industrialization, population growth and the surge in non-hazardous waste due to rapid economic expansion are anticipated to open business opportunities within waste management.

Companies are tactfully implementing recycling measures for municipal solid waste and non-hazardous industrial waste. Government initiatives focused on introducing sustainable waste management practices, greenhouse gas emissions reduction and lowering illegal dumping are expected to boost WM’s demand.

WM’s pursuit of core operational initiatives that emphasize focused differentiation and continuous enhancement, coupled with instilling price and cost discipline, improves margin. The company has embarked on a journey for long-term profitable growth and gain a competitive edge by capitalizing its assets. Cost control and process enhancement contribute to improved service quality.

WM’s steady dividend payment strategy appeals to investors. It paid $1.21 billion, $1.14 billion and $1.1 billion in dividends during 2022, 2023 and 2024, respectively. The company has stuck to paying dividends for a long time despite the fluctuations in its cash position. Hence, dividend-seeking investors are likely to keep this stock in their portfolio for a long time and benefit from the regular dividends.

Risks Faced by WM

WM operates in a highly competitive industry. National, regional and local companies give tough competition to WM. Counties and municipalities, mainly, pose a threat to the company's market share as these maintain their own waste collection and disposal activities and gain from the availability of tax revenues and tax-exempt financing. Rising competition will urge the company to make necessary investments to stay ahead of the game. This action can affect WM’s ability to balance growth and profitability.

WM’s current ratio at the end of the first quarter of 2025 was pegged at 0.83, lower than the industry average of 1.04. Furthermore, a current ratio of less than one indicates that the company will not be able to pay off its short-term obligations easily. A weak liquidity position stains WM’s long-term financial position.

WM’s Zacks Rank & Stocks to Consider

The company has a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks from the broader Zacks Business Services sector are Charles River Associates CRAI and Duolingo DUOL, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Charles River Associates has a long-term earnings growth expectation of 16%. CRAI delivered a trailing four-quarter earnings surprise of 19.4%, on average.

Duolingo has a long-term earnings growth expectation of 44.9%. DUOL delivered a trailing four-quarter earnings surprise of 22.8%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research