📊 Waste Management (NYSE:WM) has shown that even the business of trash can be immensely profitable. With strong Q2 2024 results, WM delivered a solid financial performance, boosting investor confidence. Total revenue hit $5.4 billion, representing a 5.5% increase compared to the same period last year, despite minor declines in collection and disposal volumes. This impressive growth was driven by WM’s strategic acquisitions and effective cost management, resulting in a record-breaking operating EBITDA margin of 30%.
💼 WM’s acquisition strategy has paid off, with $750 million worth of solid waste acquisitions completed by mid-year. These deals have expanded the company’s presence in growth markets like Florida, North Carolina, and Arizona. The $2.7 billion acquisition of Stericycle, a leader in the medical waste industry, is expected to close by Q4 2024. This strategic move will deliver $125 million in cost synergies, significantly enhancing profitability.
📈 WM’s free cash flow surged 32.3% in H1 2024, reaching $1.24 billion. This growth was fueled by optimized pricing strategies and sustainability investments. The company reduced operating expenses as a percentage of revenue to 60.9%, improving 130 basis points year-over-year.
🌱 Sustainability remains a key focus for WM. In 2024, WM expects to bring five new renewable natural gas projects online, adding to the two facilities completed in 2022 and 2023. This expansion and upgrades to recycling facilities position WM as a leader in environmental solutions.
💡 Looking ahead, WM’s growth story continues. Despite suspending share repurchases to focus on reducing leverage after the Stericycle acquisition, WM expects a 74.5% increase in cash flow over the next two years. WM isn’t just a trash stock—it’s a solid investment with a strong growth trajectory.
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IMPORTANT: This article is of general nature only and readers should obtain advice specific to their circumstances from professional advisers.