Waste Management vs. Republic Services: Which Pays Investors More?
Two garbage giants just surged about 17% in a month, and both ask income investors to pay up. Yield, cash coverage, and valuation point in different directions, so which one actually rewards a retiree's patience?
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Which trash dividend stock looks stronger for a retirement-focused investor right now: Waste Management (NYSE:WM | WM Price Prediction) or Republic Services (NYSE:RSG)? Shares of both companies rose sharply into November. WM is up 16.9% over the past month, and RSG is up 16.71%, so income buyers pay a premium for either one. We compared them on yield, cash coverage, and valuation, and one of them pays retirees more for their money today.
Yield and Dividend Growth: Waste Management Pays More and Raises Faster
WM’s forward annual dividend is $3.78. With the stock at $241.58, the yield comes to about 1.56%. RSG’s forward payout is $2.68, which yields about 1.08% at $248.39. For anyone living on portfolio income, that gap adds up quickly.
WM is also raising its dividend faster. It lifted the quarterly payout to $0.945 in 2026 from $0.825, a 14.5% increase. RSG went to $0.67 from $0.625, a 7.2% increase. Both have long records of raises.
WM’s quarterly dividend went up every calendar year from 2009 through 2026. RSG’s rose step by step from $0.405 in 2019 to today’s level. Winner: Waste Management.
Cash Coverage: Republic Services Has More Room to Spare
In the third quarter, WM paid $377 million in dividends out of $985 million of free cash flow, or about 38%. RSG paid $192 million in the same quarter. Its operating cash flow was $1.139 billion, and capital spending was $495 million, so dividends took about 30% of the cash left over.
RSG’s operations back that up. Its adjusted EBITDA margin came in at about 32.1%. Management raised full-year adjusted free cash flow guidance to $2.565 billion to $2.585 billion, and the board approved a new $5 billion buyback that runs through 2029. WM is improving quickly: nine-month free cash flow exceeded $3 billion, up more than 42%. Even so, its leverage of 2.92 times sits near the top of its 2.5- to 3-times target after the Stericycle acquisition. Winner: Republic Services.
Valuation: Waste Management Costs Less for More Income
WM trades at 26 times forward earnings and 31 times trailing earnings. RSG trades at 30 and 34. On enterprise value to EBITDA, WM is at 15.14 and RSG at 16.76. Analysts’ average price targets are almost identical, $255.36 for WM and $255.92 for RSG, yet WM’s share price is lower. WM also has slightly stronger pricing, with a core price of 5.8% against RSG’s 5.3%.
RSG’s premium comes from its track record. Its stock gained 99.14% over five years, compared with 63.43% for WM. A higher multiple coupled with a lower yield weighs on the income case, though. Winner: Waste Management.
Verdict: Waste Management Takes the Retirement Income Crown
For retirees focused on current income, Waste Management screens as the stronger income candidate on these metrics. The company boasts a higher yield, faster dividend growth, and a cheaper valuation. Management calls 2026 a “year of harvest,” and capital spending has fallen more than 17% this year. That frees up cash for dividends: WM has already paid $1.14 billion in dividends through nine months.
Republic Services’ profile leans toward wide margins and compounding rather than current income, a mix that tends to appeal to savers still building wealth. Its 468.03% ten-year gain beats WM’s 355.53%.
WM’s main near-term risk is a leadership change. Jim Fish retires in early January, and John Morris is set to take over as CEO. Morris has already named returning cash to shareholders as a continuing priority. Watch the stock around WM’s next earnings report, when management sets 2027 dividend and free cash flow targets.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
