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Waste Management Ramps Up Quarterly Dividend By 5.5%; Street Sees 17% Upside

Waste Management raised its quarterly cash dividend by 5.5% to $0.575 per share. This marks the waste management services provider’s 18th consecutive year of regular dividend increases.

Waste Management (WM) announced that the new dividend will be paid on March 26, to shareholders of record as of March 12.

The company’s annual dividend of $2.30 per share now reflects a dividend yield of 2.09%.

On Feb. 18, Waste Management reported 4Q results. The company’s 4Q adjusted earnings declined 5% year-over-year to $1.13 per share but outpaced Street estimates of $1.11. Revenues increased 5.7% to $4.07 billion and exceeded analysts’ expectations of $3.98 billion. As for 2021, the company expects total revenue to increase 10.75-11.25%. (See Waste Management stock analysis on TipRanks)

On Feb. 19, Oppenheimer analyst Noah Kaye maintained a Buy rating and a price target of $128 (16.5% upside potential) on the stock. The analyst said, “With key indicators supporting our view of accelerating organic growth for solid waste in FY22, we believe WM’s pull-forward of digitization investments (+ $50M y/y in FY21) could support market share gains and operating efficiencies as the post-COVID recovery takes shape.”

Wall Street analysts are cautiously optimistic about the stock. The Moderate Buy consensus rating breaks down into 4 Buy ratings versus 5 Hold ratings. The average analyst price target stands at $129 and implies upside potential of more than 17% to current levels.

Waste Management scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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