Shares of

Waste Management, Inc.

WM


scaled a 52-week high of $127.56 in the trading session on Mar 25, before closing a tad lower at $127.43.

The company’s shares have charted a solid trajectory in recent times, appreciating 33.7% over the past year, much ahead of 15.6% growth of the

industry

it belongs to.

Notably, Waste Management has witnessed a 12.3% rise in share price since it posted fourth-quarter 2020 results.

Let’s find out what’s supporting the uptick.

Dividend Hike

Waste Management’s board of directors has declared a dividend hike of 5.5%, thereby raising the quarterly cash dividend for 2021 from 54.5 cents per share to 57.5 cents per share. Annually, the dividend rate rose from $2.18 to $2.30 per share. Backed by a solid business model and growth in free cash flow generation, the company has been able to successfully raise its dividends for eighteen consecutive years. Such initiatives not only instill investors’ confidence, but also positively impact earnings per share.

Consecutive Revenue Beat

Waste Management came up with better-than-expected revenue performance in all the four quarters of 2020. The company’s top line benefited from acquisition revenues and growth from yield

.

Shareholder-Friendly Moves

Waste Management has a dominant market capitalization, and a steady dividend as well as share-repurchase policy. In 2020, 2019 and 2018, the company repurchased shares worth $402 million, $248 million and $1.004 billion, respectively. It paid $927 million, $876 million and $802 million in dividends during 2020, 2019 and 2018, respectively. The company plans to return significant cash to shareholders through healthy dividends and share repurchases in the future as well.

Such moves indicate Waste Management’s commitment to create value for shareholders and underline its confidence in its business.

Zacks Rank and Stocks to Consider

Waste Management currently carries a Zacks Rank #3 (Hold). You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


.

Some better-ranked stocks in the broader Zacks

Business Services

sector are

Interpublic


IPG

,

Charles River Associates


CRAI

and

Gartner


IT

, each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for Interpublic, Charles River Associates and Gartner is 2.4%, 13% and 13.5%, respectively.

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