This Holding Turns Heads With $3 Billion Repurchase Announcement

On Monday, we updated our pending dividend list to include new announcements for Marvell (MRVL) and the First Trust Nasdaq Cybersecurity ETF (CIBR) , but there was another dividend announcement that came after the market close. It reaffirmed our thinking for that holding, and it came with an unexpected increase in the company’s buyback program. We’re talking about Waste Management (WM) , and its 14.5% dividend increase and the new $3 billion repurchase plan.

What’s important is that the buyback program is upsized from the prior $1.5 billion one, but Waste is re-enacting the program after putting it on hold to right-size its balance sheet following its November 2024 acquisition of Stericycle.

That is a development that will turn heads when it comes to WM shares, and as you can imagine, we are already seeing a few Wall Street price targets nudged higher in response. We’ll keep our $255 target but adjust as Waste makes more progress on integrating the medical waste business, which we’ll measure by further margin improvement. However, the announcements give us ample cover to reiterate our One rating.

The company’s dividend increase will take the company’s 2026 quarterly dividend to $0.945 per share, up from $0.825, with the first such payout coming in March. That marks the company’s 23^rd consecutive dividend increase and, paired with their presence in the S&P 500, that puts them on a path to potentially join the S&P 500 Dividend Aristocrats in the next few years.

Stepping back, we see the one-two combination punch of the dividend increase and boosted buyback program reconfirming management’s strategy to drive cost out of the legacy waste business and the newer medical waste one to foster free cash flow. As part of Monday night’s announcement, the management team shared its plan to return approximately 90% of 2026 free cash flow to shareholders through dividends and share repurchases “while at the same time continuing our focus on organic growth, maintaining strong investment grade credit ratings and targeting between $100 (million) and $200 million in tuck-in acquisitions.”

Why is Waste restarting its buyback program?

It's simple. Roughly a year ago, Waste shared that it paused its buyback program while it returned its balance sheet leverage to “targeted levels” in the ensuing 18 months. On Monday night, the company shared that it expects to finish 2025 with a leverage ratio of approximately 3.1x, given plans to reduce debt by about $1 billion this year. That has cleared the way for Waste to resume share repurchases after it reports its current quarter results in late January or early February, with plans to repurchase about $2 billion in stock during 2026.

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At the time of publication, TheStreet Pro Portfolio was long MRVL, CIBR and WM.