Overview
Waste Management and Republic Services remain the two largest publicly traded U.S. waste operators, but they are sending mixed signals for a relative-value pairs trade. WM looks cheaper on multiple valuation metrics and shows higher revenue growth expectations, while RSG demonstrates stronger profitability metrics, less leverage, and clear technical momentum that has pushed the short-term spread in RSG’s favor.
Fundamental snapshot
- Waste Management (WM): $218.80 as of Sep 4, 2026 at 3:02 PM EDT; P/E 30.6x as of Jun 30, 2026; EV/EBITDA 14.2x; FCF yield 4.1%; Fair Value Upside -6.5% as of Sep 4, 2026 at 3:02 PM EDT.
- Republic Services (RSG): $223.38 as of Sep 4, 2026 at 3:02 PM EDT; P/E 31.3x as of Jun 30, 2026; EV/EBITDA 15.7x; FCF yield 3.9%; Fair Value Upside -9.5% as of Sep 4, 2026 at 3:02 PM EDT.
WM’s valuation edge is supported by faster revenue growth and a larger analyst-target upside: revenue growth of 7.2% for WM versus 3.2% for RSG, and analyst-target upside of 20.6% for WM versus 9.7% for RSG. WM’s cheaper EV/EBITDA multiple and slightly higher free cash flow yield strengthen the relative-value argument for a long-WM position and a short-RSG position.
However, RSG posts higher profitability and a cleaner balance sheet. Republic Services reported a net margin of 12.9% compared with Waste Management’s 11.1%. On leverage, RSG’s debt-to-equity ratio stands at 118.8% while WM’s is materially higher at 235.3%. Part of WM’s discount is attributable to its heavier balance-sheet leverage.
Performance of the pairs trade
Using a long-WM / short-RSG framework, recent returns have favored RSG on short horizons even though WM holds a small advantage over a one-year window. The spread moves are:
- 1 month: WM -2.86%, RSG +7.57% - trade roughly -10.43 percentage points
- 3 months: WM -0.10%, RSG +7.44% - roughly -7.34 points
- YTD: WM -0.25%, RSG +6.09% - roughly -6.34 points
- 1 year: WM -2.73%, RSG -4.48% - roughly +1.75 points
The important timing pattern is clear: the long-WM/short-RSG pairing produced a positive outcome over the one-year horizon, but it reversed sharply during the latest quarter. Despite WM’s valuation advantage, that gap has yet to be realized as price convergence.
Technical picture
Technical indicators and short-term price behavior currently favor RSG and weigh against WM:
- WM: technicals show Strong Sell on daily and weekly charts; RSI 40.1 daily and 44.6 weekly. WM is trading below its daily pivot at $220.66.
- RSG: technicals show Strong Buy on daily and weekly charts; RSI 58.7 daily and 56.9 weekly. RSG sits near its daily pivot at $224.34 and exhibits bullish MACD and moving-average signals.
These signals highlight the practical trading risk: valuation alone does not guarantee near-term price appreciation. Cheap can remain cheap while momentum is one-sided.
Pair verdict
From a pure value standpoint, WM is the stronger pick. From a trading and technical standpoint, RSG is the stronger trade at present. For the pairs thesis the evidence is mixed:
- Fundamental convergence: supports long WM / short RSG.
- Balance-sheet quality: favors RSG due to lower leverage.
- Recent price convergence: has moved against long WM / short RSG in the short term.
- Technical confirmation: currently supports RSG, not WM.
Accordingly, the relative-value argument for owning WM and shorting RSG is intact on fundamentals but lacks technical confirmation. A clearer pairs opportunity would require WM to stabilize and for RSG’s momentum to cool rather than relying on valuation differentials alone.
Limitations
Historical data referenced for longer-term context is limited to a 10-year horizon on the referenced research platform. No additional external data or forecasts are included beyond the figures cited above.