RSG — Republic Services, Inc.
$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 2026-08-31 at $221.66.
Full Research
Qué hace. Republic Services (NYSE: RSG; Phoenix, Arizona; CEO Jon Vander Ark; ~42,000 empleados) es la #2 de servicios ambientales de EE.UU.: recolección de basura y reciclaje, estaciones de transferencia, rellenos sanitarios y residuos peligrosos/industriales (Environmental Solutions). ~13 millones de clientes, 17,000+ camiones, 1,000+ instalaciones. La mayor parte del ingreso está bajo contratos multianuales con escaladores de precio: en el segundo trimestre de 2026 el precio core fue +5.3% (+6.4% en mercado abierto), consistentemente arriba de la inflación de costos.
Resultados (segundo trimestre 2026, 6 de agosto). Ingresos $4,430 millones (+4.6%, arriba de estimados); utilidad ajustada por acción $1.85 (+4.5%; consenso ~$1.82); utilidad neta $566 millones; EBITDA ajustado $1,420 millones (margen 32.1%, plano — 90 pb de expansión subyacente compensados por volúmenes de relleno del año previo, combustible y precios de reciclados). Volumen −1.6%: el precio cargó el trimestre. Guía 2026 SUBIDA: ingresos $17,200–17,300 millones; EBITDA ajustado $5,525–5,550 millones; utilidad ajustada $7.23–7.28; flujo libre ajustado $2,540–2,575 millones. Año 2025 completo: ingresos $16,590 millones (+3.5%), utilidad neta $2,140 millones.
Crecimiento. M&A: $860 millones invertidos en el primer semestre; >$1,200 millones planeados en 2026; la FTC aprobó la compra de activos de residuos peligrosos de TD*X (Corpus Christi). Sustentabilidad: Polymer Centers de circularidad de plásticos (Las Vegas e Indianápolis operando; Allentown, PA en construcción — arranque previsto a inicios de 2027) y gas natural renovable de rellenos (9 proyectos estrenados en 2025, 4 esperados en 2026; 82 proyectos de gas-a-energía).
Gates. Cascade Investment + Bill Gates poseen ~112.4 millones de acciones = 36.7% de la empresa (13D/A, agosto 2026) — la posición más grande del portafolio de Cascade (~$25,000 millones, más de la mitad del total) — y compraron ~400,000 acciones más en agosto de 2026.
Retorno al accionista. Dividendo trimestral subido ~7% en julio de 2026 a $0.670 (pagadero 15 de octubre): 23º año consecutivo de aumentos; $2.68 anual (~1.2%, payout ~35%). Primer semestre 2026: $1,040 millones devueltos ($651M recompras + $385M dividendos); autorización de $3,000 millones vigente hasta fin de 2026.
Acción. $221.66 de apertura (31 de agosto de 2026); rango 52 semanas $196.41–$235.18, cerca de máximos históricos; capitalización ~$67,700 millones; P/E ~31.3x TTM / 27.5x forward. Consenso Buy/Moderate Buy; targets promedio ~$244–248 (+10%).
Riesgos. (1) Valuación ~31x para crecimiento de un dígito medio; media calle en Hold. (2) Volumen −1.6% (construcción/demolición e industrial débiles): el crecimiento depende del precio. (3) Labor: huelga Teamsters 2025 (julio–octubre, ~2,000 trabajadores, 8 estados; Boston 82 días; costo estimado $25–50 millones) cerró con contratos ricos (ej. +17% a 4 años) — costo estructural mayor. (4) Precios de commodities reciclados volátiles. (5) Regulación de emisiones de rellenos y PFAS sectorial. (6) Dividendo modesto (1.2%): tesis de compounding, no de renta.
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.