Is RSG a good stock to buy? We came across a bullish thesis on Republic Services, Inc. on Investomine’s Substack. In this article, we will summarize the bulls’ thesis on RSG. Republic Services, Inc.’s share was trading at $209.66 as of April 16th. RSG’s trailing and forward P/E were 30.61 and 28.99 respectively according to Yahoo Finance.
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Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States and Canada. RSG delivered a strong FY2025, reinforcing its status as a defensive compounder driven by pricing power, disciplined cost control, and robust free cash flow generation with resilient performance across core end markets despite macroeconomic volatility and input cost pressures industry.
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In Q4 2025, the company grew revenue 2.2% to $4.136 billion while expanding Adjusted EBITDA margins to 31.3%, supported by a 5.8% core price increase offsetting a 1.2% volume decline while continuing to prioritize pricing discipline and margin expansion across the business segments effectively managed.
Full-year 2025 saw revenue rise 3.5% to $16.591 billion, Adjusted EBITDA reach $5.31 billion with margin expansion to 32.0%, and Adjusted free cash flow grow 11.5% to $2.43 billion while cash generation remained strong supporting disciplined capital allocation and sustained shareholder returns momentum outlook positive.
Despite $56 million in labor disruptions and volatile recycling prices, Republic maintained strong earnings momentum and cash conversion. Capital allocation remained disciplined, with $1.1 billion in acquisitions, $1.6 billion returned to shareholders, and continued buybacks.
2026 guidance calls for revenue of $17.05–$17.15 billion, ~3% yield growth, and $2.52–$2.56 billion in free cash flow despite ~1% volume decline. Strategic investments in renewable natural gas and recycling infrastructure strengthen long-term visibility and sustainability positioning. Volume softness and commodity volatility remain headwinds, but Republic’s ability to raise prices, expand margins, and compound cash flow supports a durable moat. Overall, RSG is a high-quality inflation-resilient compounder with strong returns and predictable growth, making it an attractive long-term holding.
Previously, we covered a bullish thesis on Waste Management, Inc. (WM) by Francesco Ferrari in April 2025, which highlighted stable low-volatility compounding, strong margins and consistent ROIC-driven returns. WM’s stock price has depreciated by approximately 2.95% since our coverage. Investomine’s Substack shares a similar view but emphasizes Republic Services’ pricing power, margin expansion and free cash flow acceleration rather than pure defensive stability and volatility suppression focus.
Republic Services, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held RSG at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the risk and potential of RSG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RSG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
