5 Best Waste Management Stocks to Buy Now

In this article, we discuss 5 best waste management stocks to buy now. If you want to see more stocks in this selection, check out 11 Best Waste Management Stocks to Buy Now. 

5. Stericycle, Inc. (NASDAQ:SRCL)

Number of Hedge Fund Holders: 21

Stericycle, Inc. (NASDAQ:SRCL) its subsidiaries provide regulated and compliance solutions globally, particularly in the United States and Europe. The company offers regulated waste and compliance services, which include regulated medical waste, sharps waste management and disposal, pharmaceutical waste management and disposal, controlled substance waste disposal, healthcare hazardous waste, and COVID-19 waste disposal. 

On February 24, Baird downgraded Stericycle, Inc. (NASDAQ:SRCL) to Neutral from Outperform with a price target of $53, down from $65 due to the company’s disappointing Q4 results, 2023 guidance being below expectations, and significant lowering of long-term free cash flow views. Baird believes that while there is still potential for significant improvement in Stericycle, Inc. (NASDAQ:SRCL)’s fundamentals, the removal of expected margin and free cash flow expansion has reduced the near-term upside, making the stock’s risk/reward less favorable. They also mentioned that the firm pushed out their free cash flow targets by two years.

According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on Stericycle, Inc. (NASDAQ:SRCL), compared to 20 funds in the prior quarter. John W. Rogers’ Ariel Investments is the largest stakeholder of the company, with 4.2 million shares worth $210.7 million.  

Here is what Diamond Hill Small Cap Fund has to say about Stericycle, Inc. (NASDAQ:SRCL) in its Q4 2021 investor letter:

“Bottom contributors in Q4 included Stericycle. Stericycle is the largest provider of regulated medical waste management in the U.S. Implementation of a new enterprise resource planning (ERP) system has caused productivity declines in the near term. Longer term, we believe the ERP investment will greatly increase productivity and reduce costs. We anticipate the business will continue to improve with ongoing revenue growth, as cost savings drive margin expansion amid debt paydown.”

4. Clean Harbors, Inc. (NYSE:CLH)

Number of Hedge Fund Holders: 27

Clean Harbors, Inc. (NYSE:CLH) was incorporated in 1980 and is headquartered in Norwell, Massachusetts. The company provides environmental and industrial services in the United States and internationally, operating through two segments – The Environmental Services and The Safety-Kleen Sustainability Solutions. Clean Harbors, Inc. (NYSE:CLH) is involved in the collection, transportation, treatment, and disposal of both hazardous and non-hazardous waste. It is one of the best waste management stocks to invest in. 

On March 5, Raymond James analyst Patrick Tyler Brown raised the firm’s price target on Clean Harbors, Inc. (NYSE:CLH) to $155 from $150 and kept a Strong Buy rating on the shares. The analyst noted that the company had another strong quarter and provided positive guidance for fiscal 2023. The firm believes that improving industry dynamics may lead to better pricing and margins for Clean Harbors, Inc. (NYSE:CLH).

According to Insider Monkey’s fourth quarter database, 27 hedge funds were bullish on Clean Harbors, Inc. (NYSE:CLH), compared to 30 funds in the prior quarter. Ian Simm’s Impax Asset Management is the largest stakeholder of the company, with 1 million shares worth $122.3 million. 

Meridian Funds made the following comment about Clean Harbors, Inc. (NYSE:CLH) in its Q3 2022 investor letter:

“Clean Harbors, Inc. (NYSE:CLH) is a leading hazardous waste treatment, storage, and disposal management company in North America and one of our longer-term holdings. Particularly impressive are its hazardous waste incinerators, which are nearly impossible to replicate. We also like its oil re-refinery business which is gaining recognition as a sustainable source of motor oil. Through cost controls and price increases, the company was successful in managing the inflationary environment during the period. Utilization of its incinerator network reached 90% during its most recently reported quarter and pricing increased 18% from a year ago. High and increasing base oil prices provided an additional boost to its re-refinery business, widening the spread between the price Clean Harbors charges for its re-refined oil and the price it pays for used oil. A resurgence in U.S. manufacturing activity and the accretive acquisition of HydroChemPSC also contributed to investors’ enthusiasm for the stock. Although our long-term outlook for Clean Harbors remains upbeat, we trimmed our position in the stock due to the company’s high debt balance as a result of the acquisition. We also believe the economic slowdown may eventually impact Clean Harbors, which operates in a late-cycle industry and therefore tends to have a delayed response to economic developments.”

3. Waste Connections, Inc. (NYSE:WCN)

Number of Hedge Fund Holders: 39

Waste Connections, Inc. (NYSE:WCN) offers waste collection, transfer, disposal, and resource recovery services for non-hazardous materials in both the United States and Canada. Their collection services cater to a wide range of customers including residential, commercial, municipal, industrial, and exploration and production (E&P) customers. It is one of the best waste management stocks to buy now. On February 15, Waste Connections, Inc. (NYSE:WCN) reported a Q4 non-GAAP EPS of $0.89 and a revenue of $1.87 billion, topping Wall Street estimates by $0.01 and $20 million, respectively. 

On February 17, BMO Capital’s Devin Dodge maintained an Outperform rating on Waste Connections, Inc. (NYSE:WCN)’s shares while decreasing the price target from $158 to $153. The Q4 results were in line with expectations. The analyst noted that the price target adjustment is due to more conservative assumptions in the company’s valuation methodologies. However, Waste Connections, Inc. (NYSE:WCN)’s pricing is increasing, which should result in favorable EBITDA margin expansion, the analyst wrote in a research note.

According to Insider Monkey’s fourth quarter database, 39 hedge funds were bullish on Waste Connections, Inc. (NYSE:WCN), compared to 33 funds in the prior quarter. Henry Ellenbogen’s Durable Capital Partners is the largest stakeholder of the company, with 2.20 million shares worth $292.35 million. 

TimesSquare Capital made the following comment about Waste Connections, Inc. (NYSE:WCN) in its Q3 2022 investor letter:

“Waste Connections, Inc. (NYSE:WCN) provides non-hazardous waste collection, transfer, and resource recovery services in the U.S. and Canada. Their shares rose 9% after topping second quarter estimates and raising forward guidance. This was driven by better-than-expected solid waste pricing and robust growth in the E&P waste business for oil exploration companies.”

2. Republic Services, Inc. (NYSE:RSG)

Number of Hedge Fund Holders: 41

Republic Services, Inc. (NYSE:RSG) provides environmental services within the United States. The company collects and handles recyclable, solid, and industrial waste materials, as well as transports and disposes of hazardous and non-hazardous waste streams. It is one of the top waste management stocks to monitor. On February 15, Republic Services, Inc. (NYSE:RSG) reported a Q4 non-GAAP EPS of $1.13 and a revenue of $3.53 billion, outperforming Wall Street estimates by $0.11 and $70 million, respectively. 

On February 16, Baird analyst David Manthey raised the firm’s price target on Republic Services, Inc. (NYSE:RSG) to $142 from $136 and maintained a Neutral rating on the shares. The analyst believes that the company’s Q4 2022 results were strong, exceeding his and Street expectations. Furthermore, the 2023 guidance is consistent with the company’s previous commentary, indicating another year of robust performance, Manthey wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 41 hedge funds were long Republic Services, Inc. (NYSE:RSG), and Richard Chilton’s Chilton Investment Company is a prominent stakeholder of the firm, with 1.3 million shares worth $177.6 million. 

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

Number of Hedge Fund Holders: 44

Waste Management, Inc. (NYSE:WM) specializes in environmental and waste solutions, catering to residential, commercial, industrial, and municipal customers in the United States and Canada. On February 9, Waste Management, Inc. (NYSE:WM) announced the pricing of $1.25 billion senior notes, consisting of $750 million senior notes with a 4.625% interest rate and maturing on February 15, 2030, and $500 million senior notes with the same interest rate and maturing on February 15, 2033. The proceeds from the offering will be utilized to pay off borrowings under the company’s commercial paper program for working capital, repay $500 million of outstanding 2.40% senior notes due in May 2023, and for general corporate purposes. 

On February 2, Citi analyst Bryan Burgmeier reiterated a Buy recommendation on Waste Management, Inc. (NYSE:WM) but lowered the firm’s price target on the shares to $180 from $183 following the Q4 results. The analyst believes there is a clear path to achieving sustainable free cash flow improvement.

According to Insider Monkey’s Q4 data, 44 hedge funds were bullish on Waste Management, Inc. (NYSE:WM), compared to 41 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest position holder in the company. 

Here is what Diamond Hill Large Cap Fund has to say about Waste Management, Inc.(NYSE:WM) in its Q1 2022 investor letter:

“We also initiated a position in Waste Management (NYSE:WM), one of the largest providers of waste collection services in the US. We believe it is a high-quality business with ownership of key landfill assets that provide pricing power over the long term. Its stock was trading at a discount to our estimate of intrinsic value due to short-term market concerns over an increase in growth investments—we expect these investments to be value-creating over the long term.”

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