Waste Management, Inc. (NYSE:WM) and Republic Services, Inc. (NYSE:RSG) are the two giants of North American trash, a quiet duopoly built on landfills almost impossible to replicate and pricing power that runs ahead of inflation. Both are the kind of recession-resistant compounder investors prize. And both trade near 30 times trailing earnings. But the spread matters. WM yields more at 1.80% and offers about 24.8% upside to analyst targets, while RSG, at 1.24%, offers about 12%. While both companies share a nearly identical trailing P/E ratio, their forward multiples diverge significantly. WM trades at a forward P/E of 22.52, whereas RSG commands a higher multiple at 26.32. The question is purely which to own here. Here is what each brings.
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Waste Management: Scale and Inflecting Cash Flow
With the largest landfill network and the densest routes, Waste Management is the bigger of the two. Free cash flow jumped about 35% last quarter to $1.1 billion, and the company guides to $3.75 to $3.85 billion for the year, a third straight year of strong gains, as its heavy spending on renewable natural gas and recycling plants shifts from building to harvesting returns. It also keeps absorbing the Stericycle medical-waste deal. The yield, near 1.80%, is the higher of the pair. The caution: WM just trimmed its revenue outlook on softer demand, which prompted fresh target cuts from analysts like CIBC. Additionally, the sustainability and integration projects still carry execution risk. That mix is why the Street sees more upside here, with more left to prove.
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Republic Services: The Steadier Hand With a Gates Anchor
Republic Services runs at a slightly higher EBITDA margin than WM, around 32%, and its pricing discipline shows. Core prices saw an increase of more than 6% last quarter, comfortably ahead of its cost inflation. This lifted margins even as volumes dipped. It raised full-year guidance across the board. Its most distinctive feature is its shareholder register: Bill Gates’s Cascade Investment owns nearly 38% of the company and keeps buying more. That reliability is exactly why Republic trades at a slight premium, about 30 times earnings versus WM’s 29, and yields less at 1.24%. The flip side is thinner upside, roughly 12% to the average target with nearly half the analysts rating the stock a Hold.
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The Trade-Off
The stocks offer two choices. One is an upside-plus-income. And another, a smoother ride. Waste Management offers more cash-flow momentum and a higher yield. However, the lower forward multiple suggests that heavy investments in renewable natural gas and Stericycle integration weigh on near-term earnings. Republic Services asks you to pay a small premium for steadier margins and disciplined pricing, as represented by its comparatively higher forward multiple. Additionally, it offers the comfort of the Gates stake. But this involves accepting less room to the target in return.
Both are high-quality duopolists with the same landfill moat. WM fell around 9% over the last six months, while RSG surged by almost 3%. This compares to gains of over 21% delivered by the Insider Monkey Billionaire Index over the period.
Institutional Positioning
Both stocks saw holder counts rise last quarter. Insider Monkey data shows 64 hedge funds owned Waste Management, Inc. at the end of the second quarter of 2026, up from 61, while Republic Services, Inc. rose to 58 from 54. The standout owner remains Bill Gates’s Cascade Investment, which roughly owns a 38% stake in Republic, dwarfing any hedge-fund position and keeps growing.
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This article is originally published at Insider Monkey.
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