Waste Management $WM (+0,05 %) is currently approaching an interesting buying area in my opinion.

Anyone else interested in the investment?

When would you get in?

This is my first post, so please don't hate. 🙂

I've been using the dividend strategy for a year now because it motivates me to stick with it. The simple one-ETF solution is too boring for me in the long run - I have more fun following individual stocks from time to time.

So far, I've mainly invested in dividend ETFs, and I want to keep it that way. However, I would like to add a few individual stocks to my portfolio to make it more interesting.

My goal is a maximum of 10 individual stocks so that I don't lose track. Here are the stocks I'm currently looking at:

• Realty Income ($O (+0,19 %) )
• Main Street Capital ($MAIN (-0,45 %) )
• Agree Realty ($ADC (-0,41 %) )
• STAG Industrial ($STAG (+0,15 %) )
• BlackRock ($BLK (+0,89 %) )
• The Home Depot ($HD (+0,61 %) )
• Munich Re ($MUV2 (+0,13 %) )
• Chevron ($CVX (+0,28 %) )
• American Electric Power ($AEP (+0,46 %) )
• Waste Management ($WM (+0,05 %) )
• Sixt Vz. ($SIX2 (+0,74 %) )

My questions for you:

👉 Are these stocks generally suitable for a dividend strategy?

👉 Is there potential for improvement in terms of sector and country allocation?

👉 Is there a stock that you think should definitely not be missing?

Looking forward to your opinions and tips!

#dividendenstrategie
#einzelaktien
#passiveseinkommen

As part of my ETF DIY project, I analyzed $WM (+0,05 %) analyzed them using my self-developed valuation system:

Moat: 5/5

• Market position: +
• Uniqueness / Differentiability: +
• Switching costs: +
• Technological advantage: +
• Brand loyalty: +

Growth: 4/5

• Turnover & profit: +
• Scalability: -
• Industry trends: +
• Ability to innovate: +
• Geographic expansion / penetration: +

Risk: 3/5

• Regulatory & geopolitical: -
• Market risks: +
• Competitive situation: +
• Balance sheet quality: -
• Sales diversification: +

Dividend: 1/1

• 21 years of dividend growth!

Faith: 0/1

• See WM as a solid anchor, but not a big market beater. For me it's more for diversification.

Total: 13/17

• Waste Management is saved with factor 4.

If you are not yet familiar with my system and the ETF DIY project, just take a look at my profile.

The complete analysis and my thoughts on it can also be found on YouTube:

https://www.youtube.com/watch?v=529wNHBLoFs

I bought waste

(Not literally or is it?)

The company recently reported another strong set of figures and in my opinion is in a very solid position.

However, the share has lost over 5% in the last few days. Perhaps this is due to the insider sale of 5.5 million dollars by John j Morris? Or perhaps there is a lot of shifting from defensive stocks into tech stocks at the moment?

I don't know the answer, but I took advantage of the supposed opportunity for the first tranche

$WM (+0,05 %)

Before the moment is over again, I would like to take a moment to celebrate my first small milestone: after almost a year of active trading, I have reached €10,000.

Most of the time I was still a student - with small savings rates, a lot of curiosity and learning by doing (and many mistakes). I've now been working as an engineer for a month and can invest properly for the first time. I'm excited to see where the journey will take me.

I am pursuing a long-term growth strategy, but I also like the charm of dividends as a motivator. With half of the bonuses, I will probably buy individual shares or burn a penny or two by gambling.

I know things aren't going perfectly, but I'm prepared to learn from mistakes and constantly question my strategy.

One small fly in the ointment: my Mercedes shares are currently still blocked.

I look forward to your feedback, experiences and tips - on the subject of crypto, I'm still torn as to whether I've missed the party.

Savings plans: 690€

200€ - $IWDA (+0,43 %)

60€ - $EIMI (-0,31 %)

40€ each - $JEGP (-0,23 %)
$MAIN (-0,45 %)

25€ each - $NOVO B (+1,36 %)
$HTGC (+0,52 %)
$GOOGL (+0,92 %)
$WMT (+0,02 %)
$CRWD (+0,49 %)
$AMZN (+0,34 %)
$MELI (+0,24 %)
$META (+0,66 %)
$NET (+0,62 %)
$ALV (+0,07 %)
$WM (+0,05 %)
$ASML (+0,08 %)
$SAP (+0,3 %)
$PLTR (+0,75 %)

Waste Management $WM (+0,05 %) is the third largest position in my portfolio with approx. 4.5%... and I feel quite comfortable with that.

The Q1 figures came out on 29.04. I have categorized the figures for myself.

With this post and my general classifications, I am also trying to provide a good, comprehensible overview to give all "shareholders" or future shareholders an adequate insight and ensure an understanding of the company.

SourcesQ1 Report [1] and Earnings Call [2]

WM presents a strong Q1, with double-digit sales growth and a solid operating performance. However, earnings per share are lower despite record sales. Find out why this is not necessarily a bad sign here. Have fun!

📊 ESTIMATES VS. REPORTED

📊 Q1 figures at a glance

• Turnover6.02 billion $ (+16.7 %)
• Adjusted EBITDA1.72 billion $ (+12.2 %)
• Adjusted EPS1.67 $ (previous year: 1.75 $)

Why is sales growing strongly but EPS falling?

In the first quarter of 2025, WM reported adjusted EPS of $1.67, compared to $1.75 in the previous year, despite a +16.7% jump in sales, does that sound alarming at first? But it's not...

1 . The Stericycle takeover has a double effect: (more context later)

Sales increase because Stericycle is now fully included in the balance sheet ($619m sales in Q1).

At the same time, however, costs are also rising:

• Interest payments on new debt that was used for financing
• Amortization of the purchase price
• One-off integration costs (e.g. system conversions, personnel)

All of this has a negative impact on earnings per share, even though the new division is already profitable.

2 . Special tax effects & discontinuation of subsidies

• In the previous year, WM benefited from tax credits for alternative fuels, which expired in 2025.
• This explains part of the decline compared to the strong Q1 2024.

3 . Higher capital costs put pressure on free cash flow

• Even though operating cash flow remained solid ($1.21 billion), free cash flow was only $475 million, leaving less room for buybacks or earnings growth.

Conclusion so far: The falling EPS is not a warning signal, but a consequence of...

• strategic growth (acquisition),
• temporary integration costs,
• expiring tax benefits and
• increased interest rate environment.

In the long term, EPS should improve again significantly as soon as synergies from the Stericycle integration and new RNG/recycling plants take effect.

🚛 What is the traditional core business doing?

The so-called legacy business includes:

• Collecting, transporting and disposing of waste
• Customers: Cities, households, companies
• Service: Planning, logistics, landfills, disposal & recycling

Q1 2025:

• Turnover5.40 billion $
• Adjusted EBITDA1.62 billion $
• EBITDA margin: 30 % (Q1 2024: 29,6 %)
• EBITDA growth: +5 % YoY

Growth driver:

• Core pricing +6.5 %
• Cost optimization:...

COO John Morris:

"We reduced operating costs for the sixth consecutive quarter, now at 60.5% of sales."

The reason for this:

• Focus on employee retention & process automation
• Route planning & resource deployment improved through digital tools
• Residential margin at 20% for the first time in 6 years due to targeted withdrawal from low-margin customers
• Withdrawal from residential (private households):

• A lot of effort, low margin
• Focus now on commercial & industrial = better cost/income ratio

Comment (COO John Morris):

"This was the fourth quarter in a row with a 30% margin and that despite a difficult basis for comparison and winter influences."

WM is concentrating on quality rather than volume, more income through targeted pricing and a focus on high-margin customers.

💊 WM Healthcare Solutions Stericycle takeover: between waste and medicine, WM reorganizes itself

WM acquired Stericycle, the leading provider of medical waste disposal, for $7.2 billion in 2024.

The business is less cyclical, fast-growing and in a regulated market.

Q1 2025:

• Turnover619 million $
• EBITDA95 million $
• EBITDA margin: 15,3 %

• Margin improvement compared to Q4 2024: +20 basis points
• Target synergies: $80-100 million in additional EBITDA by the end of 2025
• Target synergies: USD 250 million annually by 2027 (ongoing savings + efficiency gains)

-> e.g. through joint administration, logistics, location optimization

Comment (CEO):

"Our customers value our digital environmental platform and nationwide network - a clear competitive advantage."

♻️ Recycling & Renewable Energy

• Recycling: WM sorts & sells raw materials such as paper, plastic and metal
• Renewable Energy: Recovery of biogas (RNG) from landfills

Q1 2025:

• Combined EBITDA contribution18 million $
• Ø price for recycled raw materials88 $/ton (previous year: 84 $)
• Positive increase, but still below previous highs (e.g. 2022: approx. 120 $)

An EBITDA contribution of $18 million compared to total EBITDA of $1.72 billion?

That sounds vanishingly small? I asked myself the same question...

Why the amount seems low, but still fits

1 . Recycling & Renewable Energy are capital-intensive, long-term oriented

• These areas require high investments in advance (e.g. plants, automation, RNG projects).
• The returns come over years, not in the first or second quarter.

2 . Growth still in the start-up phase

• Many plants (especially RNG) are still under construction or have recently come online.
• CEO Jim Fish said: "8 new RNG plants are currently under construction, all of which are scheduled for completion in 2025."
• The full EBITDA impact will therefore only unfold later.

3 . Recycling margins are heavily dependent on raw material prices

• Prices for recycled raw materials were $88/tonne in Q1, which is well below previous highs (e.g. 2022: $120).
• Ergo: fluctuating contribution to EBITDA, but not a structural problem.

4 . Benchmark: 20% growth YoY

• EBITDA from Recycling & Renewable Energy increased by >20% compared to Q1 2024 .
• The trend is therefore positive, even if the absolute figure appears small.

➡️ It is a growing business area with long-term potential. EBITDA contributions will increase in the next quarters & years as soon as new plants are up and running.

💰 Further financial figures

• Adjusted EBITDA margin (total): 28.5% (previous year: 29.6%)
• Free cash flow: $475 million (previous year: $714 million)
• Investments in sustainability128 million $
• Cash position216 million (end of 2024: $414 million)

Further voices from the earnings call:

CFO Devina Rankin on financial strategy & risks

• Free cash flow in Q1 as planned: $475 million
• CapEx at $831 million, focus on sustainability & fleet ramp-ups
• Customs risks lowas WM pre-produced equipment at an early stage
• Share buybacks further paused, focus on deleveraging
• Leverage ratio: 3.58x, target by the end of 2025: ~3.15x

"Despite interest burden and investments, we are fully on track - operational strength and synergy potential remain intact."

CEO Jim Fish emphasized:

"I'm proud of the fact that we've become a predictably strong performer, quarter after quarter, over the past few years."

He sees WM in a strong strategic position, particularly thanks to three drivers:

• Growth in the core business (Collection & Disposal)
• strong contribution from Stericycle
• Sustainable investments in recycling & biogas (RNG)

Particularly exciting:

• The automated recycling centers achieved EBITDA margins twice as high as non-automated plants.
• 2 new plants went online in Q1, with 7 more to follow by the end of 2025.
• 8 new RNG plants are under construction, all with high yields and progressing according to plan.

"Our sustainability strategy is working, these projects are delivering strong, growth-oriented EBITDA."

The call once again showed how operational fine-tuning, automation and acquisitions go hand in hand and underlined the following points:

• Technology and pricing secure margins
• Sustainability is more than a buzzword, it delivers profit
• Stericycle brings new potential that is structurally anchored

P/E ratio & current valuation (personal assessment, no investment advice)

Current level: ~ 34,49

In recent years: between 25-30

➡️ the current P/E ratio signals that the market believes WM will continue to enjoy stable growth and security.

Are there any special effects in earnings that distort the P/E ratio?

Yes, the ones already mentioned. Nevertheless, explained again:

1 . EPS (earnings per share) is currently falling slightly due to:

• Interest costs due to Stericycle financing
• Depreciation & integration costs
• Elimination of tax credits for alternative fuels

➡️ This means:

• The "G" in the P/E ratio is currently under pressure, but not structurally weakened
• The P/E ratio appears artificially higher because earnings are temporarily lower

➡️ The current high P/E ratio is explainable and temporary

• WM remains a defensive quality stock with strong cash flow
• Not a bargain, but a solid investment for long-term strategists
• If you think long-term (3+ years, you will find a company with a clear strategy & growth path here

🔮 Conclusion & outlook

WM remains a fundamental long-term runner with vision.

Although the Stericycle financing is putting pressure on EPS and cash flow in the short term, the focus on high-margin areas, sustainability and healthcare opens up long-term potential.

• Positive: Strong legacy business, successful entry into healthcare disposal

• NeutralEPS slightly down, cash flow temporarily under pressure

• RisksInterest costs, margin pressure in recycling, political uncertainty regarding sustainability

My conclusion: WM delivers structurally, those who think long-term will find stability and perspective here.

I remain invested, position will not be increased for the time being.

________________

Thank you for reading 🤝

________________

Sources:

[1] https://investors.wm.com/static-files/00de6f79-f0b6-4b6a-af79-9e5f892c73f5

[2] https://investors.wm.com/static-files/9db3d0d5-0c4d-47fa-aab1-f0bf71a86859

_______________

$WM (+0,05 %)
$RSG (+0,17 %)
$WCN (+0,09 %)
$CLH (+0,17 %)
$CWST (+0,15 %)

Waste Management Inc.$WM (+0,05 %) ) slightly missed analysts' expectations in the first quarter of 2025, which led to a 1.6% decline in the share price after trading hours. Adjusted earnings per share (EPS) were USD 1.67 (expected: USD 1.69) and revenue was USD 6.02 billion (expected: USD 6.15 billion), although revenue still increased by 16.7% compared to the previous year.

Key findings

• EPS: USD 1.67 (below expectation of USD 1.69)
• Sales: USD 6.02 billion (below expectation of USD 6.15 billion)
• Sales growth in core business: 4.7
• Price increases in core business: 6.5
• Contribution from WM Healthcare Solutions: USD 619 million in sales, USD 95 million in operating EBITDA

Corporate performance

WM achieved solid growth in its core business, driven by disciplined price increases and efficiency measures. The newly integrated Healthcare Solutions segment made a significant contribution to sales and EBITDA growth. The operating margin of the core business remained stable at 30% and operating EBITDA increased by 6% to USD 1.62 billion.

Financial highlights

• Operating cash flow: USD 1.21 billion
• Free cash flow: USD 475 million
• Investments in sustainability projects: USD 128 million

Outlook & forecast

Waste Management confirmed its outlook for the full year 2025 and emphasized the resilience of its business model and the successful integration of new business areas. The company remains on track to achieve its strategic and financial targets.

Statements from the management

CEO Jim Fish emphasized the strong implementation of the strategic priorities and underlined the sustainable growth strategy as well as the value contribution of the Stericycle acquisition.

Risks & challenges

• Slight earnings shortfall could weigh on the share price in the short term
• Integration of Healthcare Solutions poses operational challenges
• Cost increases could impact margin potential

Atlas Copco $ATCO B (+2,85 %)

BAE Systems $BA. (-1,69 %)

Rollins $ROL (+0,15 %)

Cintas $CTAS (-0,09 %)

Waste Management $WM (+0,05 %)

Parker Han$PH (+0,54 %)

Which companies do you see as particularly promising for a long-term investment?

I think it's about time. But not for an all-in, because 🍊 is unpredictable 😄

Also bought:

$AMZN (+0,34 %) (x2) $GOOGL (+0,92 %) (x2) $NVDA (+0,6 %) (already a few days ago) $DELL (+0,59 %) (x2) $PG (+0,17 %)

x2 means a few days ago and today.

At the top of the list are $NEE (-0,05 %)
$WM (+0,05 %)
$ORI (-0,26 %)
$PANW (+0,4 %)
$HD (+0,61 %)

PS: my crystal ball says it's time, because we've now approached a zone twice. But whether this is actually a first indicator of a positive outlook... who knows...