Republic Services Has the Momentum, But Waste Management Has Another Advantage

Key Points

• Republic Services beat third-quarter earnings expectations and raised its full-year guidance for the second consecutive quarter.
• Waste Management missed earnings estimates but reported stronger free cash flow growth and maintained its full-year outlook.
• Republic Services offers stronger recent revenue growth, while Waste Management has a larger dividend and a lower valuation based on the figures cited.

The garbage professionals were in prime time last week, and no, we don’t mean the Eagles and Cowboys on Monday Night Football. Republic Services Inc. NYSE: RSG and Waste Management Inc. NYSE: WM are the two largest waste and recycling services firms in North America, and both reported earnings in the final days of October. Waste Management has typically been the top performer in the space, with consistent earnings growth, a healthy free cash flow engine, and a growing dividend. But Republic Services shares have outperformed both Waste Management and the S&P 500 in 2026, and the company posted another beat and raise in Q3. Is Republic Services now the stock to own in the environmental solutions industry? The answer depends on what you’re looking for from your investments.

Republic Services Has Momentum After Second Straight Guidance Raise

Republic Services reported its fiscal Q3 2026 results after the bell on Oct. 29, scoring its eighth straight earnings per share (EPS) beat.

Revenue of $4.56 billion also beat the estimated $4.42 billion, which represented year-over-year (YOY) growth of 8.2%. Adjusted margins lost 110 basis points due to higher diesel and healthcare costs, but management still boosted revenue, adjusted EBITDA, and free cash flow guidance for Q4.

The company also announced a new buyback authorization of up to $5 billion between 2027 and 2029. The current buyback program has $800 million remaining, and the company has paid out $848 million in buybacks, $577 million in dividends, and $1.1 billion for acquisitions so far in 2026.

The stock is up more than 15% year-to-date (YTD), and most of that gain has come in the last three months. A golden cross back in August hinted at the rally to come, and now the stock has broken out above the 50-day and 200-day moving averages.

The Moving Average Convergence Divergence (MACD) indicator has also shown bullish reversal and crossover patterns, and analysts have begun boosting targets following the earnings news.

Waste Management EPS Miss Shrouds Consistent Growth and Cash Generation

Waste Management reported its fiscal Q3 results earlier in the week on Oct. 27, delivering mixed results. Revenue of $6.85 billion beat expectations with 6.3% YOY growth, but the company missed EPS projections for the fourth time in the last two years.

The company reaffirmed its full-year 2026 revenue outlook rather than raising it after a Q2 trim, disappointing the market and causing a 4.5% drop in the report's aftermath.

Despite the market reaction, four analysts raised price targets after the report, including Barclays, which raised its target to $283.

Even with the miss, the company’s EPS growth remains stronger than Republic Services, and it generated $3 billion in free cash flow over the last nine months, a 42% YOY increase.

WM shares are up about 8% YTD, but have also shown signs of breaking out lately. A sudden nearly 15% surge in October brought shares into the green, and the stock now trades above the 50-day and 200-day moving averages for the first time since July.

The post-earnings drop failed to break the 200-day MA, suggesting potential support, and the Relative Strength Index (RSI) shows bullish momentum returning to the stock.

Republic Services Leads in Growth, But Waste Management Offers a Bigger Dividend

RSG shares were outperforming WM before earnings, and the gap widened after the reports were released. On growth, Republic Services has the edge: its revenue grew faster in the most recent period (8.2% vs. 6.3%), it raised guidance across the board rather than reaffirming, and its commercial container volumes have turned positive while Waste Management’s are still negative. Analysts are boosting price targets after the release, and the stock has several fundamental and technical tailwinds behind it.

However, the companies’ valuations suggest investors are paying a premium for that momentum. RSG trades at around 30.5 times forward earnings and roughly 4.4 times sales, compared to about 26.4 times forward earnings and 3.6 times sales for WM. Waste Management also generated more free cash flow in absolute dollars, reporting $3.01 billion so far in 2026 versus $2.28 billion in adjusted free cash flow for Republic Services. The companies calculate these measures differently. Free cash flow guidance also favors Waste Management with a $3.75 billion to $3.85 billion fiscal 2026 projection against adjusted free cash flow guidance of $2.57 billion to $2.59 billion for Republic Services.

In a growth-favoring environment, Republic Services may continue to outperform. Its management has a growth mindset and backs up that strategy by directing more free cash flow toward acquisitions. But if investors seek more defensive positioning, Waste Management may be the preferred option. The company returned more than 90% of its free cash flow to shareholders during the first nine months of 2026 and has a larger dividend, currently paying $3.78 annually with a dividend payout ratio of just 49%. Management also upped the dividend 14.5% this year, the 23rd consecutive year of payout increases. If your portfolio lacks growth, consider RSG. But if you want steady income and a more defensive investment, consider WM.