These 4 Waste and Services Stocks Collect Recurring Revenue

Four waste and services stocks, Waste Management (WM), Republic Services (RSG), Waste Connections (WCN), and Cintas (CTAS), share a common trait: they generate recurring revenue through services their customers must acquire. This dependable demand results in steady cash flows, steady earnings growth, and the ability to fund growing dividends.

WM is the largest player in the North American waste management market, with a 19% market share. It generates revenue from collection, disposal, recycling, healthcare solutions, landfill gas-to-energy, and secure information destruction. Its revenue has grown at 11% annually over the past three years, driven by acquisitions and investments.

WM uses its cash to fund growth and pay shareholders through a steadily rising dividend and share repurchases. Republic Services and Waste Connections are the next largest players in the North American waste and recycling market. Both companies have 80% of their revenue with annuity-like characteristics. They reinvest their earnings into growth (acquisitions and sustainability projects) and return excess cash to shareholders.

Cintas serves the workplace services industry, providing uniforms, mats, restroom supplies, first-aid products, and fire-safety services through recurring rental and service programs. Its revenue has grown 10.9% year-over-year, and it has a history of paying growing dividends and repurchasing shares. These four stocks offer long-term investors stable income and potential growth due to their recurring revenue models and strong cash flow generation.