Waste Management ended 2024 with double digit adjusted operating EBITDA, and projected similar gains in 2025. Strategic acquisitions, rising recycling prices, and automation and technology automation resulted in significant margins in 2024. The company is currently the top holding in the KraneShares Rockefeller Ocean Engagement ETF (KSEA ), making it a fund worth consideration this year.
Waste Management (WM) posted 11% growth in adjusted operating EBITDA in 2024, according to their fourth quarter earnings statement. What’s more, the company grew margins by an impressive 30% last year, the highest since the company’s inception. Free cash flow also grew by 21.8% in 2024.
“The WM team achieved another year of exceptional results by continuously improving our core business, expanding our sustainability platforms, and adding medical waste and secure information destruction solutions for our customers,” Jim Fish, president and CEO of WM, said in the earnings press release.
WM acquired Stericycle last November, North America’s biggest medical waste service provider. The acquisition grows the company’s recycling capabilities, while also harnessing opportunity in the healthcare industry’s expansion.
The company remains one of the largest sources of recycling, building out infrastructure and driving innovation. WM also drives renewable energy growth, capturing landfill gas and converting it to compressed natural gas used to fuel the company’s trash and recycling trucks. They also use former landfills as solar farms that contribute to local grids.
WM anticipates another notable year this year, announcing intentions to increase dividends by $0.30 to $3.30 this year. “We expect to deliver a second consecutive year of double-digit growth in adjusted operating EBITDA in 2025,” Fish noted.
Actively Managed KSEA Captures Waste Management's Gains
KSEA is actively managed and seeks to invest in companies that significantly impact oceans and ocean resources, known as the “blue economy.” Investing in these companies allows Rockefeller Asset Management, the fund’s subadvisor, to deploy its proactive engagement strategy. Active engagement with companies provides the dual benefits of risk reduction and increased sustainability.
Through its ocean focus, KSEA brings diversification potential to existing sustainability-focused portfolios. KSEA invests in commercial fishing, waste management, aquaculture, renewable energy, and other industries.
The strategy focuses primarily on companies dubbed “ocean improvers.” These companies offer the most significant potential positive impacts for sustainability via engagement. The fund also invests in companies categorized as “ocean leaders” and “ocean solutions.” The strategy avoids companies that endanger ocean health, such as deep-sea mining companies or offshore oil.
Current top holdings within the fund include Waste Management (4.46% weight), Trimble Inc (3.86%), and Amazon.com (3.77%) as of February 10, 2025. KSEA has a management fee of 0.86%.
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