Waste Management (WM) & 3 Other Waste Removal Stocks To Buy

The Waste Management industry broadly includes the waste collection services as well as the waste treatment and disposal services of hazardous, nonhazardous and recyclable materials. These include waste materials generated from industrial and commercial operations, household chores and medical services.

The waste materials are usually collected by local vehicles and transferred by long-distance automobiles to various disposal facilities such as waste combustors (waste-to-energy plants), solid waste landfills and compost dumps. Proper waste management techniques help in recycling various discarded materials and reduce greenhouse gases by producing alternate sources of energy through sustainable development.

Industry Dynamics

The Waste Management industry is somewhat recession-proof as steady demand from the residential and healthcare sectors nullify the vagaries of the industrial, construction and commercial business sectors. Although industry revenues were affected by the Great Recession to some extent, the impact was relatively much less as compared to other cyclical industries.

As the industrial and construction sectors have gradually improved post-recession, demand has further picked up as more waste materials are being generated. The industry is likely to witness a steady uptrend in the future with the rising consumer awareness and higher use of recycled materials,

Furthermore, a significant portion of the waste generated in the country is derived from consumer products and packaging materials. As the job market has picked up over the last five years with steady employment opportunities and rising income, consumer spending has improved considerably leading to higher waste generation. This in turn has raised the prospects for appropriate waste management efforts, fuelling higher industry demand.

The industry is also characterized by high barriers to entry as it involves strict adherence to environmental rules and policies and regulatory scrutiny. New entrants are required to either construct a new landfill site or waste-to-energy plant or buy any existing facility, both of which are cost-extensive propositions. Consequently, the existing industry players often enjoy a stranglehold on the market.

Top 4 Picks to Buy Now

The Zacks guideline says, “Your most profitable stocks will be found in the top Zacks Ranked Industries... 50% of a stock's price movement can be attributed to the group that it's in.” Hence, the outlook for industries with Zacks Industry Rank #88 and lower is considered to be 'Positive.' The Waste Removal Services perfectly fits the bill of a high-flying sector with Zacks Industry Rank #29. Let us cherry pick some industry stocks that are also backed by a Zacks Rank #2 (Buy).

Waste Management, Inc. (NYSE:WM) : Headquartered in Houston, TX, Waste Management is the largest provider of comprehensive waste management services in North America. The company provides collection, transfer, recycling and resource recovery, as well as disposal services to nearly 20 million residential, commercial, industrial and municipal customers. It is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the U.S.

Republic Services, Inc. (NYSE:RSG) : Republic Services is the second largest domestic non-hazardous solid waste company in the U.S. It provides non-hazardous solid waste disposal services for commercial, industrial, municipal and residential applications through a network of 340 collection operations in 39 states and Puerto Rico. The company owns or operates 201 transfer stations, 193 solid waste landfills, 69 landfill gas and renewable energy projects and 67 recycling facilities.

Waste Connections Inc. (NYSE:WCN) : Waste Connections is an integrated solid waste services company that provides waste collection, transfer, disposal and recycling services across the U.S. and Canada. It also offers non-hazardous oilfield waste treatment, recovery and disposal services in various active natural resource producing areas in the country through its R360 Environmental Solutions subsidiary.

Waste Connections serves over six million residential, commercial, industrial, and exploration and production (E&P) customers in 39 states. In addition, the company provides intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.

Nuverra Environmental Solutions, Inc. (OTC:NESC) : Headquartered in Scottsdale, AZ, Nuverra offers comprehensive, full-cycle environmental solutions to customers in the energy market. Focusing on environmentally compliant and sustainable solutions, it is one of the largest companies in the U.S. dedicated to the removal, treatment, recycling, transportation and disposal of restricted solids, fluids and hydrocarbons for major exploration and production companies operating in the oil and gas basins. Its national distribution platform and comprehensive solutions protect, enhance and advance sustainable energy growth.

Moving Forward

“One man's trash is another man's treasure.” True to this proverbial saying, these Waste Removal stocks are likely to turn the waste materials into recyclable items or dispose them through sustainable business practices to preserve the environment and reduce pollutants. The solid industry parameters and prudent financial metrics of their own make these stocks prized picks ahead of the earnings season.