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Living in the West, we enjoy having clean streets, clean rivers, etc. People here aren’t dumping their garbage in rivers or on the roads, but instead put it in bins. Meanwhile, we look at countries that are developing, and we see rivers filled with garbage, streets littered with trash, and people have to walk around piles of trash to get to work or stores.

Now, the West wasn’t always what we think today, with clean streets and everything. In the past, it was no different than many developing nations today, with trash lying around the streets, and the rivers being dumping grounds for people’s trash.

The reason why the streets of Chicago, where waste management as a business was born in the US, started having clean streets was because a Dutch immigrant named Harm Huizenga began collecting trash in Chicago for a small fee. He had a modest wagon and built a business around collecting trash.

After World War 2, there was a shift towards disposable products that were designed to make lives simpler. This was because wartime production led to significant advancements in industrial processes and materials like plastics, and factories needed to shift from producing goods for war to producing goods for consumers.

People saw ads like these (below), and that helped boost the demand for disposable products:

As you can see, these disposable products were all marketed to make life simpler, and they have made life simpler for all of us. The growth in disposable products and the massive population growth after WW2 have all led to a boom in the waste management industry.

Seeing the booming demand for waste collection, Harm's grandson Wayne Huizenga and two other investors, Dean Buntrock and Larry Beck, founded Waste Management $WM ( ▼ 0.36% ) , known as the world's largest waste disposal company. Waste Management is the first truly integrated waste company since it both collects trash and manages the landfill where it stores the garbage.

The Bull Case

In the era of AI, people tend to think AI is the bull case for every company out there. For manufacturers, AI will help make manufacturing more efficient. For retailers, AI will help boost marketing efforts and figure out ways to improve supply chains.

For Waste Management, AI is a small part of my bull case. In an interview with the company president, John Morris, Waste Management has been using AI, along with other innovations, to make the business less labor-intensive. These innovations help workers do more work while being safer, and for its recycling business (one part of the bull case), it has helped sort recycling materials in different sections. In the past, humans were the ones sorting recyclable items.

While AI helps with lowering costs, the bull case I’m discussing is on its future. Revenue growth, green energy, improving the environment, and M&A.

Waste Collection & Landfills

To start, we will talk about the bread and butter of Waste Management $WM ( ▼ 0.36% ) , which is waste collection. In their 2022 Investor Presentation, management noted that there is an immense opportunity for the company to consolidate the solid waste and recycling market. Within fragmented markets, growth tends to come from consolidation. United Rentals $URI ( ▲ 2.39% ) is a great example of a company that grew in a fragmented market (equipment rental) by consolidating it.

The opportunity to acquire more regional, local, and municipal players is huge. For the municipal players, the pandemic hurt their budgets and prompted them to raise debt. With concerns over managing their debts while meeting important expenses like pension obligations and emergency services, municipal players may look to sell their waste businesses to Waste Management $WM ( ▼ 0.36% ) and use the cash to help improve their balance sheet.

For regional and local players, the opportunity of getting a lucrative windfall from selling the business to Waste Management $WM ( ▼ 0.36% ) is very appealing. We’ve heard of private equity firms acquiring plumbing businesses and other blue-collar businesses, and the founders of those businesses were eager to sell to get their big windfall. Since cash is king in this market, it wouldn’t surprise me if many want to sell their businesses and cash out at what they think is the top of the market.

Additionally, the acquisition of Stericycle makes the waste business stronger and more lucrative. I wrote on an X thread on it (below) but TLDR: the medical waste sector will grow faster than population growth and GDP due to the aging population.

Even if the waste collection industry stagnates, it’s important to recognize Waste Management as a business with a huge moat. As part of collecting waste from customers, Waste Management also owns the landfills where it dumps the waste. Landfills are extremely difficult to replicate in any jurisdiction and oftentimes, local, regional, and municipal players (yes, the ones $WM ( ▼ 0.36% ) is looking to acquire) tend to pay Waste Management for access to their landfills.

Beyond waste collection and storing the waste in landfills, Waste Management is also in the business of recycling and renewable energy.

Recycling

As part of Waste Management’s waste collection business, Waste Management also collects items that need to be recycled.

When recycling was first introduced, humans were the ones separating items that could be recycled from those that couldn’t. This process is both labor-intensive, and many wouldn’t want to do that job.

To solve both the issues with labor and to boost the accuracy of what can and can’t be recycled, Waste Management has invested immensely in automation equipment to sort recyclable materials. As seen in their 2025 Investor Presentation (below), the company has reduced headcount in its Elkridge Automation facility by 60% while being able to handle bigger volumes of waste for recycling.

The estimated payback period for $WM ( ▼ 0.36% ) ’s investments in automating its recycling plants is 6 years, assuming the commodity price for recycled items is $125 per ton. Even if the commodity price for recycled materials varies, according to the 2025 Investor Presentation, these recycling facilities look to be not only profitable but also cash-flowing assets.

The recycling business has a couple of growth drivers:

• New geographies

• Recycling new materials

• Environmental policies

• Partnerships with businesses to provide circularity solutions for their products

• Recycling food waste

Recycling food waste is a new frontier for $WM ( ▼ 0.36% ) . There is legislation going across the US and Canada that is diverting food and yard waste from landfills to recycling facilities as a way to reduce methane emissions.

What Waste Management can do with food waste is turn the organic waste into RNG (renewable natural gas), which is the foundation of its energy business. While some say this is part of the recycling business and others say it should be part of the energy business, I chose to discuss it here in the recycling section since we’re discussing recycling here.

Green Energy

Out of the three business lines, green energy is where I’m the most bullish on. While we think of green energy as solar or wind, what Waste Management $WM ( ▼ 0.36% ) creates is something called Renewable Natural Gas (RNG). This is energy created from the gases that are created when organic materials decompose.

Why am I the most bullish on this business line? Because when people use green energy to justify why a company like Tesla $TSLA ( ▲ 2.11% ) has huge upside, they’re looking at the fact that energy demand is only accelerating from here.

Look at this chart below from Voronoi, a division of Visual Capitalist. From 2023 to 2035, the rate of energy demand growth is expected to be significantly higher than in previous periods.

There are many factors contributing to surging energy demand during this decade, but it all boils down to these three main trends:

• a growing global middle class

• technologies requiring more energy

• growing global population

As the world gets wealthier, naturally, demand will only increase. While environmentalists are trying to create a world where we can have less energy but still remain wealthy, the reality is it’s impossible. Many of the things that make life great require energy. Many of the things that make a country wealthy require energy.

Given that energy demand is expected to accelerate this decade and that countries are becoming wealthier over time, it is clear that energy demand will continue to rise. This is why the opportunity to create green energy that’s abundant and helps meet the insatiable energy demand is huge.

Waste Management $WM ( ▼ 0.36% ) has a unique opportunity with green energy. They own many landfills across the US and Canada, and these landfills are highly engineered facilities, designed to encapsulate all contents for controlled management.

As trash and food scraps break down in a landfill, they create a powerful gas called methane. Instead of letting this harmful gas escape into the atmosphere, Waste Management uses a special network of pipes to capture it and convert it into clean energy at many of its facilities.

Already, $WM ( ▼ 0.36% ) powers their garbage trucks with RNG. They already know how to create RNG, and have also been selling RNG to utility providers. Plus, they’ve also been generating renewable identification numbers (RINs) just by converting their trucks from running on natural gas to RNG. Those RINs are then sold for revenue, similar to how $TSLA ( ▲ 2.11% ) generates revenue by selling regulatory credits to other automakers.

The interesting thing about Waste Management’s investments in building out RNG facilities is the payback period on those investments are around 3 years, which is far more attractive than investments in recycling facilities upgrades. The RNG opportunity is so lucrative that even Chevron $CVX ( ▲ 1.53% ) has partnered with dairy farmers to convert cow waste into RNG.

While Waste Management’s RNG business has been focused on powering its own truck fleet and giving utility providers energy to power households, the opportunities that RNG has are more abundant. Whatever energy we need, RNG itself, hydrogen, or electricity, RNG can be used to help energize the future wherever it’s headed.

Below, you’ll see in Clean Energy Fuel Corp’s $CLNE ( ▲ 4.53% )  May 2025 investor presentation, RNG has many applications. And for those wondering, both $CLNE ( ▲ 4.53% ) and $CVX ( ▲ 1.53% ) have partnered to provide RNG to truck operators operating in the Los Angeles and Long Beach ports.

With immense demand for energy and the attractive ROI of investing in RNG expansion, Waste Management’s green energy business is the biggest part of my bullish case. With time, I see green energy becoming the same size as its garbage collection business.

The world wants to transition to green energy, and the world also wants to have a source of fuel that doesn’t depend on the weather for energy production. RNG is a source of energy that does both. Plus, the existing fossil fuels infrastructure we already have can help the world transition to using RNG, like pipelines and refineries.

Dear Aspiring Entrepreneurs…

I hope that reading the history of Waste Management can assuage your fears of finding a business idea that works. Starting something as simple as a waste collection business in an area that struggles with keeping its streets clean, and charging residents or the government a fee for those services can be rewarding.

Many countries around the world have issues with collecting waste, and entrepreneurs like yourself can follow Huizenga and create a waste collection business there. The profits and revenues are going to be a lot less, but there is a big need for someone to provide those services. And as those countries grow, your business benefits too.

Even outside of waste collection, some countries have issues with the cost of internet, electricity, etc. Great countries are built by entrepreneurs who’ve built businesses around the solutions to those issues. By building a business around those issues, those solutions can stay for a long time.

With a boring business, if you’re creative enough, you can find ways to grow your business beyond its traditional services. We see this with Waste Management as they can go beyond trash collection by finding items to recycle and converting the gases created in their landfills to energize their trucks and people’s homes.

Disclosure

About Me

I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.

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