Time to Buy the Dip on Waste Management Stock?

Key Points
Waste Management isn’t a stock that many investors think of as “hot,” but it is.
Shares of the waste removal specialist have been that way for a long period of time.
The recent dip is admittedly shallow, but investors may not want to await a further pullback.
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When scouring the universe of buy-on-the-dip candidates, of which there are plenty these days, investors often hone in on growth stocks, including some artificial intelligence (AI) names, in the hopes of finding "good deals."
It's an understandable approach. Plenty of famed AI stocks have retreated materially since the start of 2026, confirming that the realm of "hot" stocks that have dipped is growing. On the other hand, dip buyers can rejoice in knowing that there's something for everyone in the pullback garden. There are viable options for risk-averse investors looking for top stocks to buy and hold.
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Trash hauler Waste Management (NYSE: WM) merits a place in the buy-on-the-dip conversation. Yes, waste removal is about as far from glitzy as it gets at the industry level, but the company has an attractive story to tell.
Is it time to dash for trash?
Regarding WM, as the company is also known, a couple of housekeeping items are necessary. First, its recent dip has been relatively shallow. For the month ended April 2, the stock retreated 3.5%, bringing it to 5.1% below its 52-week high. That's not even a correction, and those data points may indicate that interested investors may not want to wait for a deeper decline.
Second, perhaps to the surprise of some investors, WM fits the bill as a hot stock, even though it operates in an industry that's decidedly "unsexy." Over the past decade, this has been one of the best-performing industrial stocks, trouncing both that sector and the S&P 500.
That epic run is rooted in solid fundamentals. Last year, WM posted $25.2 billion in revenue, up from $14.91 billion in 2018. Over that time, the company was a dedicated buyer of its own shares, slashing its shares outstanding count to 402.94 million at the end of 2025 from nearly 424 million in 2018.
Obviously, the garbage collection company notched a scintillating run over the past decade, and a sequel isn't promised. However, WM has some tailwinds from its recycling and renewable natural gas businesses, while some rivals are struggling with slack volumes in the construction and industrial segments. Said differently, investors considering the garbage/recycling space ought to evaluate the leader in the clubhouse, and that's WM.
Balance sheet clutter could be removed
If there's something "trashy" about WM, it's the $23.4 billion in debt as of the end of its fiscal 2025's third quarter, but there are some bright spots. The company's leverage ratio may move into the more desired 2.5x to 3x range as soon as this year.
And the junk hauler could generate as much as $19 billion in free cash flow from 2025 through 2029. That capital could support WM's knack for smart, manageable acquisitions, as well as its shareholder rewards plans.
Speaking of returning capital to investors, last December, WM unveiled a new $3 billion share repurchase program while boosting its quarterly dividend, marking the 23rd straight year the company has raised the payout. Those commitments may be appealing to long-term investors while confirming the stock's status as one to buy on the dip.
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Todd Shriber has no position in any of the stocks mentioned. The Motley Fool recommends WM. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.