From Waste Management to WM: How an Industry Giant Came to Be
In 1893, Dutch immigrant Harm Huizenga collected trash in Chicago for $1.25 per wagon. In 1968, Huizenga’s grandson and two other investors were inspired by his hard work and humility, founding Waste Management (now rebranded as WM) to serve the community. In 2025, that same company is worth $91.4 billion.
Its revenue is segmented by collection, transfer, landfill, and recycling. Collection is WM’s main driver (55% of revenue) and spans commercial, industrial, and residential services. WM’s competitive advantage in collection is its ownership of landfills: about 70% of collected waste is disposed of in WM’s 263 landfills, resulting in higher consolidated margins and operating cash flows because WM does not have to outsource most of its disposal services.
For the full year 2024, WM delivered 11% growth in adjusted operating EBITDA and achieved a record 30% corresponding operating EBITDA margin, with guidance for continued double-digit growth in 2025. The company reported $22.1 billion in revenue, representing 8.0% growth from the previous year and surpassing competitors Republic Services ($16.9 billion) and Clean Harbors ($5.8 billion).
WM attributed this growth primarily to a 6.7% increase in core price, a performance metric used by management to evaluate the effectiveness of pricing strategies. Core price is not derived from financial statements and relies on historical assumptions to ensure comparability between reporting periods. Approximately 40% of WM collection contracts are tied to index-based pricing, while the remaining 60% adjust incrementally with market conditions.
From the beginning, WM’s strategy has been developing long-lasting client relationships. This is evidenced by their annual churn rate of 9% for commercial and industrial customers, which suggests that the average customer stays with WM for over 10 years.
In line with listening to customers, WM has taken up sustainability initiatives in recent years based on three pillars: repurposed material, renewable energy, and thriving communities. In 2023, WM reported repurposing 15.2 million tons of material and using 43% of its captured landfill gas for beneficial use applications, which leverage methane to generate renewable natural gas, a lower-carbon energy source. WM also made $18.7 million in charitable contributions in 2023.
WM opened eight recycling facilities in 2023, raising their total number to 102, with the goal of increasing safety, speed, and sorting capabilities. WM also added nine organics processing facilities, raising their total number to 49. Two of these organics processing facilities were FOG2Fuel facilities, which divert waste away from landfills by converting fats, oils, and grease into feedstock for biodiesel production. This process reduces landfill holding costs while providing a new revenue stream. The remaining organics processing facilities transform food scraps and yard waste into high-quality compost.
WM’s new sustainability strategy primarily lies in its renewable energy efforts, including $3 billion in planned investments in its sustainable businesses between 2022 and 2026. $1.6 billion of those investments are allocated towards the construction of 20 plants that capture natural gas at its landfills to fuel power generation and its natural-gas-vehicle fleet. The remaining investment is allocated towards its recycling plants. Its sustainability investments also position it favorably in the market compared to competitors like Republic Services who invested $683 million in sustainability in 2023.
WM’s active landfills not only have landfill gas collection systems to capture gas that can be turned into renewable energy but also have cover systems that minimize emissions, odors, fires, pests, dust, litter, and precipitation infiltration. Final capping systems are also placed over landfills finished with accepting waste to minimize stormwater infiltration in order to maximize landfill gas capture.
“You might not think of us as an energy company, but it’s a very important product of our business and a focus area for us,” Chief Executive Jim Fish told the Wall Street Journal.
In 2023, WM converted 66% of their diesel-powered collection fleet to alternative fuel vehicles with lower-emissions natural gas, making its 12,000 natural gas trucks the largest alternative-fuel fleet in the waste management industry. WM has achieved operational cost savings of $1 billion, primarily due to the adoption of these alternative fuel vehicles, alongside a reduction of over 3.5 million metric tons in carbon emissions. WM is also exploring other alternatives, such as electric and hydrogen-powered vehicles.
Moving into 2025, renewable energy remains one of WM’s top priorities. They are currently in the process of integrating its recent acquisition Stericycle, a medical waste disposal company. WM acquired Stericycle in November 2024 with an enterprise value of $7.2 billion, making the deal WM’s largest acquisition. The acquisition is expected to generate over $125 million in annual run-rate synergies, leveraging WM’s expertise in logistics, technology-enabled cost optimization, and its extensive waste disposal network.
This strategic acquisition advances WM’s sustainability initiative and expands into a new vertical of healthcare waste management. The acquisition has led to the formation of the WM Healthcare Solutions division, which integrates Stericycle’s medical waste and secure information destruction services.
The US medical waste management was valued at $2.88 billion in 2024 and is projected to grow at a CAGR of 7.9% from 2025 to 2034. WM’s entry into the medical waste sector through their acquisition of Stericycle positions the company to capitalize on this growing market by offering sustainable waste management solutions to healthcare providers.
Overall, WM maintains a strong outlook, demonstrating resilience to economic cycles due to the essential nature of waste management services. While industrial and commercial waste collection fluctuates with manufacturing and construction activity, and landfill gas revenue is influenced by volatile energy prices, residential waste collection remains a necessity, ensuring stable demand regardless of market conditions. This consistent demand supports recession-resistant revenue and strong, steady cash flow.
WM mitigates risks through service diversification, long-term contracts, and operational efficiencies. Its beta coefficient of 0.78 reflects low volatility, and its stable cash flows enable balanced capital allocation, including a 6% CAGR in dividends over the past five years.
Since its founding in 1968, WM has driven growth through sustainability, strategic expansion, and disciplined financial management. With a focus on acquisitions and operational efficiency, the company is well-positioned for long-term success.
