10 Best Recycling Stocks to Buy According to Hedge Funds

2. Waste Management, Inc. (NYSE:WM)

Market cap as of November 7: $87.69 Billion

Number of Hedge Fund Holders: 49

Waste Management, Inc. (NYSE:WM) provides environmental solutions to residential, commercial, industrial, and municipal customers. It offers collection services, including picking up and transporting waste and recyclable materials from where they were generated to a transfer station material recovery facility (MRF).

Waste Management, Inc. (NYSE:WM)’s investment in sustainability initiatives in recycling automation and renewable natural gas makes it one of the best recycling stocks to buy. While the stock is trading near its all-time highs after gaining about 19% year to date, it has produced a total return of 57.3% over the past three years on generating impressive returns from the collection, transporting and processing of commercial, industrial, and residential waste.

While its sales growth stalled at the height of the pandemic in 2020 and 2021, they have seen a significant rebound over the past two years, leading to substantial margin improvement. Waste Management, Inc. (NYSE:WM) delivered solid third-quarter results on October 29, 2024, with earnings per share of $1.96, above consensus estimates of $1.88. Revenue in the quarter was up 7.9% year over year to $5.61 billion.

Waste Management, Inc. (NYSE: WM) benefits from steady cash flow from a dependable clientele because waste is essential to life. It gains over time from both an expanding economy and a growing population. Waste, consumption, and production all rise with population and economic output. Consequently, the company expects its full-year revenue to grow by 6% from a previous guidance of 5.75%.

It has also hiked its free cash flow to between $2.1 billion and $2.2 billion from a previous guidance of $2 billion to $2.15 billion. The expected FCF growth should allow the company to continue rewarding investors with dividends that currently yield 1.40%.