November 07, 2025 a 12:46 pm
WM: Dividend Analysis - Waste Management, Inc.
Waste Management, Inc. demonstrates a robust and reliable dividend policy with a current yield of 1.48%. With 28 years of consistent dividend history, WM showcases financial stability and resilience in a competitive sector. The disciplined payout ratios and a gradual dividend growth highlight the company's commitment to sustainable shareholder returns. Investors may find this stock attractive for steady income with potential for moderate dividend appreciation.
📊 Overview
Waste Management, Inc. is known for its consistent dividend distribution, backed by a strong and stable business model. The company's current dividend yield stands at 1.48% with a dividend per share of 3.01 USD. Holding a remarkable 28-year dividend history, WM has not experienced any recent cuts or suspensions.
| Metric | Detail |
|---|---|
| Sector | Waste Management |
| Dividend Yield | 1.48% |
| Current Dividend per Share | 3.01 USD |
| Dividend History | 28 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The dividend history of Waste Management points to a consistent and rising dividend payment trend, crucial for long-term income-focused investors. This history reflects the company's commitment to rewarding shareholders.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 2.475 |
| 2024 | 3.00 |
| 2023 | 2.8 |
| 2022 | 2.60 |
| 2021 | 2.300 |
📈 Dividend Growth
The dividend growth is a significant factor for assessing the potential increase in shareholder returns. Waste Management's dividend growth over the last 3 and 5 years is modest but demonstrates consistent upward trends.
| Time | Growth |
|---|---|
| 3 years | 9.26% |
| 5 years | 7.91% |
The average dividend growth is 7.91% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios are critical for understanding dividend sustainability. The EPS-based ratio stands at 47.37%, while the free cash flow-based ratio is 50.55%, suggesting a balanced approach to dividend payments and reinvestment.
| Metric | Ratio |
|---|---|
| EPS-based | 47.37% |
| Free cash flow-based | 50.55% |
The payout ratios indicate a prudent management strategy, ensuring that dividends are sustainable without compromising future growth.
Cashflow & Capital Efficiency
Key indicators such as Free Cash Flow Yield and Earnings Yield provide insights into cash return and profitability relative to capital efficiency. Monitoring CAPEX to Operating Cash Flow and Free Cash Flow to Operating Cash Flow Ratios can indicate efficiency in capital utilization and cash flow resiliency.
| Year | Free Cash Flow Yield | Earnings Yield | CAPEX to Operating Cash Flow | Stock-based Compensation to Revenue | Free Cash Flow / Operating Cash Flow Ratio |
|---|---|---|---|---|---|
| 2024 | 2.66% | 3.38% | 59.94% | 0.5% | 40.06% |
| 2023 | 2.52% | 3.18% | 61.35% | 0.46% | 38.65% |
| 2022 | 3.01% | 3.46% | 57.03% | 0.43% | 42.97% |
These cash flow and capital efficiency ratios suggest a healthy operating model capable of generating sufficient cash flow to meet its dividend obligations as well as funding expansion or reduction in debt.
Balance Sheet & Leverage Analysis
Debt and liquidity ratios are imperatives in assessing financial stability. Waste Management's financial structure, notably its leverage ratios, reflect its ability to manage debt while providing sufficient liquidity.
| Year | Debt-to-Equity | Debt-to-Assets | Debt-to-Capital | Net Debt to EBITDA | Current Ratio | Quick Ratio | Financial Leverage |
|---|---|---|---|---|---|---|---|
| 2024 | 3.02 | 55.96% | 75.14% | 3.80 | 0.76 | 0.73 | 5.40 |
| 2023 | 2.35 | 49.44% | 70.16% | 2.76 | 0.90 | 0.86 | 4.75 |
| 2022 | 2.19 | 47.77% | 68.63% | 2.69 | 0.81 | 0.77 | 4.58 |
The analysis shows a significant leverage position, necessitating prudent debt management to avoid over-leverage while maintaining adequate liquidity levels.
Fundamental Strength & Profitability
Evaluating Return on Equity (RoE), Return on Assets (RoA), and various margin metrics is essential to assess profitability and operational efficiency. WM's margins exhibit stability, indicating solid business performance.
| Year | Return on Equity | Return on Assets | Net Margin | EBIT Margin | EBITDA Margin | Gross Margin | R&D to Revenue |
|---|---|---|---|---|---|---|---|
| 2024 | 33.28% | 6.16% | 12.45% | 18.38% | 29.26% | 29.07% | 0.00% |
| 2023 | 33.38% | 7.02% | 11.28% | 17.24% | 28.01% | 28.15% | 0.00% |
| 2022 | 32.68% | 7.13% | 11.36% | 16.73% | 27.65% | 27.24% | 0.00% |
Strong profitability metrics underline the company's ability to generate substantial returns on investment and optimize operational strategies.
Price Development
Dividend Scoring System
| Criterion | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 31/40
Rating
With a strong and stable dividend history, WM is well-positioned as a reliable income-generating investment. The company's disciplined payout and robust operational metrics make it a viable option for conservative investors seeking consistency and moderate growth. Continued monitoring of leverage and capital efficiency is recommended to maintain a healthy financial profile.