The Garbage Business Eyes an Overflowing Dumpster

It’s shaping up to be a really messy year, and Wall Street is salivating. Investors are eyeing garbage truck companies, which may soon be all the rage after a new report from financial firm Jeffries said the waste industry will…

Jennifer
Image Credit: Waste Managment
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It’s shaping up to be a really messy year, and Wall Street is salivating.

Investors are eyeing garbage truck companies, which may soon be all the rage after a new report from financial firm Jeffries said the waste industry will soar post-pandemic.

Trash is King

The report forecasts that shares in U.S. garbage collection companies are about to rocket as post-pandemic life means people will get out and do stuff and — hopefully, in this case — leave a big mess behind.

  • It’s expected that personal spending items other than food and energy will grow 7.1 percent in the U.S. this year. That’s a lot to clean up after.
  • Total U.S. trash volumes will grow by 4 percent in 2021 — double the recent average annual growth rate of 2 percent.

“Waste is an underappreciated reopening play,” said Jefferies analyst Hamzah Mazari, who called it “one of the best environments to own coming out of COVID-19.”

Room to Pile Up: Shares in Waste Management, Republic Services and Waste Connections — the three biggest trash companies in America — are already up double digits this year after only single digit growth in 2020.

But there’s way more room for growth. “Consumption in 2021 will be up double digits compared to 2020,” added Mazari, who dubbed now “the best time to own garbage in recent history.”

Waste Management, for example, will see a huge boost once baseball fans return to games, since it services 60 percent of America’s baseball parks.

the takeaway

After a year of everyone rewatching The Sopranos at home, it’s nice to know Tony’s business has a strong future.

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