Deep Dive on Waste Management, Inc.

Hi Everyone 👋,

It’s time for our GRIT Monthly Stock Deep Dive! This month’s stock is one of Genevieve’s favorites, and we are breaking it down for you today… You don’t want to miss this.

Before we get into it, here is what we added to GRIT VIP 🚀 this month! 👇

• Famous billionaire and investor stock portfolios ✅

• 9,000+ pages of investment resources ✅

• Multiple educational articles for new investors ✅

Stock Deep Dive: Waste Management, Inc. (WM-US, $68.24B)

In all the buzz around artificial intelligence and tech investing, it’s easy to forget that other industries can be searched for attractive companies. While betting on growth can lead to outsized returns, it can also lead to outsized losses. Value companies, on the other hand, have more steady growth profiles, less cyclicality, and trade at far cheaper valuations. Both types of investments play important roles when constructing your portfolio.

Today, we’re channeling our inner Warren Buffett and looking at a value play in a critical space. As we roll into December, I’ll let the Grinch introduce this company:

We’re talking trash. Well, more specifically, waste disposal. This is a tale of steady growth, consolidating a fragmented market, and providing a critically important service that is tough to replace. This month, we’re covering Waste Management (WM-US).

• Overview 👉 What Does Waste Management Do + How Do They Win?

• How Do They Make Money? 👉 Business Segments

• By The Numbers 👉 Key Metrics

• Risks 👉 Potential Pitfalls

Overview 👉 What Does Waste Management Do + How Do They Win?

Waste Management either directly owns or operates the largest network of landfills throughout the US and Canada. They partner with customers and communities to manage and reduce waste at each stage, from collection to disposal, while recovering resources and creating clean, renewable energy. At the end of 2022, the company operated 259 landfills, 337 transfer stations, and 97 recovery facilities.

Alarm bells should be going off. Waste Management is an Asset Aggregator (both horizontal and vertical). With scale comes better cost structures and more optimized revenue streams. The scale provides several key advantages: 1) Vertical integration improves cost margins; 2) Horizontal integration improves revenue capture; 3) Lowers financial variance due to broad-based operational diversification; 4) A nationally recognized brand offering corporate sponsorship opportunities; 5) Flexibility to invest in more novel technologies (like renewable waste systems) and potential first mover advantages; and 6) Capacity to absorb more significant acquisitions and invest in new product categories. In the trash game, the king of the pile can build the biggest moat. 

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