Why Waste Management’s 22-Year Dividend Streak Makes It a Must-Hold Income Gem

The search for reliable dividend-paying stocks is a cornerstone of income-focused investing, and few companies exemplify this better than Waste Management (WM). With a 22-year dividend growth streak, resilient cash flow, and an undervalued stock price, Waste Management is primed for long-term outperformance. Let’s dissect why this environmental services giant deserves a place in your portfolio today.

The Power of a 22-Year Dividend Growth Streak

A vibrant image of Waste Management’s logo intertwined with recycling symbols, emphasizing sustainability and growth

Waste Management’s dividend track record is nothing short of remarkable. Since 2003, the company has increased its dividend every single year, with a 10% boost in 2025 to $0.825 per share quarterly. This streak reflects a deep commitment to shareholder returns, backed by consistent free cash flow generation.

The latest dividend hike isn’t a fluke. In Q1 2025, Waste Management produced $1.21 billion in operating cash flow, even as it invested $128 million in sustainability projects like automated recycling systems. Despite rising interest payments tied to its Stericycle acquisition, the company still generated $475 million in free cash flow, easily covering the $336 million paid in dividends—a 9.4% year-over-year increase.

This cash flow resilience is critical. Dividend growth isn’t just a policy—it’s a reflection of management’s confidence in long-term profitability. Waste Management’s 12.2% EBITDA growth in Q1 2025 underscores its ability to navigate macroeconomic headwinds, from inflation to rising debt costs.

Valuation: GuruFocus Says $238 – Current Price is a Steal

At $225 per share, Waste Management is trading below GuruFocus’ $238 GF Value, a metric that factors in intrinsic value based on fundamentals like cash flow, dividends, and growth. Analysts agree: the average 12-month price target is $247.50, implying a 9.72% upside, while 80% of analysts rate the stock “Outperform” or higher.

Why the optimism? Waste Management’s strategy is paying off. The Stericycle acquisition (specializing in medical waste) expanded its revenue streams, while investments in renewable energy projects (converting landfill gas to electricity) are reducing costs and boosting margins. These moves aren’t just about growth—they’re about future-proofing cash flow.

The Case for Undervaluation and Growth

Income investors often face a dilemma: yield vs. growth. Waste Management offers both. Its 1.46% dividend yield may not be the highest, but its compound annual dividend growth rate (CAGR) since 2010 is 6%—outpacing the S&P 500’s 4.5% dividend growth.

Moreover, Waste Management’s payout ratio remains conservative at 46%, leaving ample room to grow dividends even as it invests in high-return projects. The pause on share buybacks (to manage Stericycle-related leverage) is temporary, and the company’s $22.88 billion debt load is well-managed with a strong EBITDA coverage ratio.

Why Act Now?

• Analyst Consensus: 9.72% upside to $247.50 by 2026.
• Undervalued Stock: $225 vs. $238 GF Value.
• Dividend Safety: 22 years of growth with a conservative payout ratio.
• Strategic Moves: Stericycle diversification and renewable energy bets are paying off.

Conclusion: A Rare Blend of Yield and Growth

Waste Management isn’t just a trash collector—it’s a sustainable cash flow machine with a proven track record of rewarding shareholders. With an undervalued stock, analyst upside, and a dividend that’s grown for over two decades, this is a rare opportunity to lock in 1.46% yield while riding organic growth and strategic investments.

The question isn’t whether Waste Management can continue its streak—it’s whether you can afford to miss out on this once-in-a-generation income growth stock.

Investors seeking stability and growth should act now—Waste Management’s valuation and dividend resilience won’t stay this attractive forever.