RSG — Republic Services, Inc.
Price when we picked it (Aug 31, 2026)
$221.66
Target: $245.92 (+10.9%)
P/E Ratio
31.3
P/E Forward
27.5
Dividend
1.2%
Market Cap
$67.7B
EPS
$7.06
Consensus
Buy
What they do
Republic Services (Phoenix; CEO Jon Vander Ark; ~42,000 employees) is the second-largest environmental services company in the US, behind Waste Management: it collects trash and recycling, runs transfer stations and landfills, and is growing in hazardous/industrial waste (Environmental Solutions). ~13 million customers; 17,000+ trucks; 1,000+ facilities across North America.
The power of the business is in the contract: most revenue comes from multi-year contracts with price escalators — which is why it can raise prices (5.3% in the second quarter; 6.4% in the open market) above its costs, year after year, while volume barely moves.
New layers of growth: Polymer Centers (plastics circularity — Las Vegas and Indianapolis operating; Allentown under construction for 2027), renewable natural gas from landfills (9 projects launched in 2025, 4 more in 2026; 82 gas-to-energy projects in total) and acquisitions: $860 million invested in the first half, with more than $1.2 billion planned for 2026. Bill Gates (Cascade Investment) is the anchor shareholder: 36.7% of the company, and he kept buying in August.
Why we like it
Three reasons.
- THE MOST BORING TOLL BOOTH IN THE WORLD: garbage knows no recessions and multi-year contracts with escalators give it permanent pricing power — price +5.3% in the second quarter against volume −1.6%, and still revenue +4.6% ($4.43 billion), adjusted earnings $1.85 (+4.5%, above consensus) and 2026 guidance RAISED ($7.23–7.28 adjusted EPS).
- 23 YEARS OF DIVIDEND INCREASES: it just raised it ~7% to $0.67 quarterly ($2.68 a year), payout ~35%, plus $651 million of buybacks in the half — and new growth layers (polymer recycling, renewable landfill gas, >$1.2 billion of acquisitions this year).
- BUFFETT'S VOTE... BUT FROM GATES: Cascade/Gates own 36.7% of the company (~$25 billion — more than half his portfolio and his #1 position) and BOUGHT MORE in August 2026. Buy consensus with a ~$244–248 target (+10%).
Key Risk
#1: valuation. At ~31x earnings and ~27.5x forward for a business growing mid-single digits, it's priced for perfection — half of Wall Street has it at Hold and any stumble gets punished. Others:
- weak volume: −1.6% in the second quarter (soft construction and demolition); today ALL the growth comes from price;
- labor: the 2025 Teamsters strike (~2,000 workers, 8 states, Boston 82 days) cost $25–50 million and ended in rich contracts (+17% over 4 years in some locals) — structurally higher labor costs and an emboldened union;
- recycled commodity prices: volatile — they helped this year, other years they hit the margin;
- environmental regulation: landfill emissions and the sector's PFAS exposure;
- the dividend (1.2%) is modest: this is a compounding stock, not an income stock.
This is educational and informational content, not financial advice. Always consult a qualified financial advisor before making investment decisions.
Vectorial Data picked RSG on Aug 31, 2026 at $221.66.
Full Research
What it does. Republic Services (NYSE: RSG; Phoenix, Arizona; CEO Jon Vander Ark; ~42,000 employees) is the #2 US environmental services company: trash and recycling collection, transfer stations, landfills and hazardous/industrial waste (Environmental Solutions). ~13 million customers, 17,000+ trucks, 1,000+ facilities. Most revenue sits under multi-year contracts with price escalators: in Q2 2026 core price was +5.3% (+6.4% open market), consistently above cost inflation.
Results (Q2 2026, August 6). Revenue $4.43 billion (+4.6%, above estimates); adjusted EPS $1.85 (+4.5%; consensus ~$1.82); net income $566 million; adjusted EBITDA $1.42 billion (32.1% margin, flat — 90 bp of underlying expansion offset by prior-year landfill volumes, fuel and recycled commodity prices). Volume −1.6%: price carried the quarter. 2026 guidance RAISED: revenue $17.2–17.3 billion; adjusted EBITDA $5.525–5.55 billion; adjusted EPS $7.23–7.28; adjusted free cash flow $2.54–2.575 billion. Full 2025: revenue $16.59 billion (+3.5%), net income $2.14 billion.
Growth. M&A: $860 million invested in H1; >$1.2 billion planned for 2026; the FTC cleared the TD*X hazardous-waste acquisition (Corpus Christi). Sustainability: Polymer Centers for plastics circularity (Las Vegas and Indianapolis operating; Allentown, PA under construction — start-up planned for early 2027) and renewable natural gas from landfills (9 projects launched in 2025, 4 expected in 2026; 82 gas-to-energy projects).
Gates. Cascade Investment + Bill Gates own ~112.4 million shares = 36.7% of the company (13D/A, August 2026) — the largest position in Cascade's portfolio (~$25 billion, more than half the total) — and bought ~400,000 more shares in August 2026.
Shareholder returns. Quarterly dividend raised ~7% in July 2026 to $0.670 (payable October 15): 23rd consecutive year of increases; $2.68 a year (~1.2%, payout ~35%). H1 2026: $1.04 billion returned ($651M buybacks + $385M dividends); $3 billion authorization through the end of 2026.
Stock. $221.66 at the open (August 31, 2026); 52-week range $196.41–$235.18, near record highs; market cap ~$67.7 billion; P/E ~31.3x TTM / 27.5x forward. Buy/Moderate Buy consensus; average targets ~$244–248 (+10%).
Risks. (1) ~31x valuation for mid-single-digit growth; half the street at Hold. (2) Volume −1.6% (weak construction/demolition and industrial): growth depends on price. (3) Labor: the 2025 Teamsters strike (July–October, ~2,000 workers, 8 states; Boston 82 days; estimated cost $25–50 million) closed with rich contracts (e.g., +17% over 4 years) — structurally higher cost. (4) Volatile recycled commodity prices. (5) Landfill emissions regulation and sector PFAS. (6) Modest dividend (1.2%): a compounding thesis, not income.
This is not financial advice. Consult a certified financial advisor.
The author may hold positions in the securities discussed.
Past performance does not guarantee future results.