The waste management sector may not sound exciting, but right now there’s a great deal of back and forth regarding Texas-based Waste Management, Inc., whose price has been downgraded by Stifel–even as the stock remains popular with other investors.
Then, of course, there’s the environmental impact of the company and its industry: While Waste Management itself is dedicated to sustainability, dealing with waste in a “green” way can be challenging, to say the least.
So where do the financial and environmental elements intersect?
Despite being in the midst of a somewhat turbulent time financially, Waste Management is generally believed to be poised for growth. Thom Weisel’s Stifel Nicolaus downgraded their stock from a “buy” rating to a “hold” rating recently, reducing the estimated target price from $85 to $80. Still, other investors, like Eric Richardson’s Cambria Investment Management LP, Judith Shine’s Shine Investment Advisory Services Inc., and more are purchasing larger shares based on the prediction of long-term improvements. Of 14 analysts covering the company, 6 have a “buy” rating, 1 “sell,” and 7 “hold,” which means 43 percent are positive.
The generally hopeful outlook for the company likely comes from the fact that the world will always need waste management, and WM is the leading provider of this service in the US, Canada, and Puerto Rico. They and their subsidiaries collect, sort, recycle, and dispose of waste. And WM is making a real effort to keep their work as environmentally friendly as possible.
Waste, as you might expect, can have a significant impact on the environment. The EPA frequently reevaluates the way companies dispose of hazardous and municipal solid waste and adapts best practices accordingly. There are many laws in place to keep things tidy as well: the 1976 Resource Conservation and Recovery Act (RCRA), as well as related amendments, keep general practices efficient and safe, while the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) governs the disposal of contaminated waste.
According to Waste Management’s website, their waste disposal practices are in line with these policies, and they supplement them with extended education and performance goals. By focusing on consuming less, emitting less, protecting the environment, enhancing the communities they service, and complying with all rules and regulations, WM creates value and sustainability. Their Environmental Department has developed an Environmental Management Program to ensure green performance and to protect the environment in all of their practices, as well as educating staff on the latest laws around practices and documentation.
WM’s financial future may be a bit up in the air, but they continue to provide services that show their dedication to making waste management practices as sustainable as possible.