11 Best Recycling and Waste Management Stocks To Buy in 2022

Waste management and recycling are not glamorous, but with a growing global population and climate change, these services are essential. Unsurprisingly, the global waste management market is expected to grow from $1.6 trillion in 2020 to $2.5 trillion by 2030. Learn how to invest in the top recycling and waste management companies. 

Matt Johnston   Updated May 14th, 2022

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Why invest in recycling and waste management?

The¬†waste management industry¬†is critical to human health and the environment. After all, waste contributes around 3% of global greenhouse gas emissions. And yet over 3 billion people worldwide don’t have access to basic waste disposal services. Even in the United States, only around one-third of waste is recycled.¬†

The industry must expand as the growing global population produces more waste, and climate change forces us to find ways to tackle that waste sustainably.

How is the world dealing with waste today?

The most common method of waste disposal globally is open dumping, which typically takes place in low-income countries. According to UN Habitat, 3.5 to 4 billion people use illegal dumping sites or unregulated waste disposal services. 

Another common waste disposal method is landfilling. But landfills pose risks to health and the environment. They release methane, a potent greenhouse gas and major contributor to climate change. They can also produce odors and smoke as well as contaminate water supplies.

Composting and recycling are more sustainable methods of waste disposal. And yet, only about 5% of plastic waste in the U.S. gets recycled, partially because landfill disposal of plastics is cheaper than recycling. There is clearly an opportunity to innovate to develop better recycling methods for plastic and other materials. The challenge so far has been to make them cost-competitive.

You may have already heard the term “circular economy.” It refers to a way of producing and consuming that involves reusing and recycling materials and products for as long as possible. As governments and consumers become more concerned about reducing waste and pollution, innovative waste management and recycling companies will likely benefit.

Are there any publicly traded recycling companies?

There are many publicly-traded recycling and waste management companies. However, recycling and waste management are not exactly the same. Most publicly traded stocks in this space engage in general waste management practices like landfilling, in addition to recycling. Companies like Li-Cycle are an exception.

Recycling and waste management stock list

  • Waste Management Inc (WM)
  • Republic Services Inc (RSG)
  • Waste Connections Inc (WCN)
  • Clean Harbors Inc (CLH)
  • Veolia Environnement SA (VEOEY)
  • Li-Cycle Holdings Corp (LICY)
  • GFL Environmental Inc (GFL)
  • Casella Waste Systems Inc (CWST)
  • PureCycle Technologies Inc (PCT)
  • Cleanaway Waste Management Ltd (TSPCF)
  • Quantafuel ASA (QNTFF)

Read more about each company.

1. Waste Management Inc (WM)

  • Market capitalization: $65 billion
  • 2022 return: -3%

Just as described, Waste Management provides waste management services throughout the U.S. and Canada. It collects waste and provides transfer, disposal, and recycling services. The company also develops and operates facilities that convert landfill gas like methane into energy.

Waste Management generated a consolidated net income of $1.8 billion on operating revenue of $17.9 billion in 2021. Net income grew 21.5% as revenue expanded 17.8% compared to 2020.

The company’s shares are up nearly 11% over the past year (and only down 3% this year) and are trading at a forward price-to-earnings (P/E) ratio of about 29.2x using an estimate of 2022 earnings.

2. Republic Services Inc (RSG)

  • Market capitalization: $41 billion
  • 2022 return: -3%

Republic Services provides a variety of environmental services in the U.S. It offers waste collection and operates transfer stations, landfill sites, recycling processing centers, disposal facilities, salt-water disposal wells, and more. It is also engaged in landfill gas-to-energy and other renewable energy projects.

Republic Services earned a net income of $1.3 billion in 2021, up 33.3% compared to the previous year. Revenue grew 11.2% to $11.3 billion. 

Shares of Republic Services are down 3% this year, a pretty good outcome considering the market conditions. The stock is currently trading at a forward P/E ratio of 27.7x based on an estimate for 2022 earnings.

3. Waste Connections Inc (WCN)

  • Market capitalization: $8 billion
  • 2022 return: -6%

Waste Connections is a solid waste services company that operates in the U.S. and Canada. It provides non-hazardous waste collection as well as transfer and disposal services. It also offers resource recovery through recycling and renewable fuel generation. The company also engages in oilfield waste treatment and intermodal services for transporting cargo and solid waste containers.

Waste Connections earned a net income of $618.5 million on $6.2 billion of revenue in 2021. Net income more than tripled compared to 2020 as revenue grew 13%.

The shares, which are down 6% in 2022 through mid-May, are currently trading at a forward P/E ratio of 32.9x using an estimate for 2022 earnings.

4. Clean Harbors Inc (CLH)

  • Market capitalization: $4.9 billion
  • 2022 return: -7%

Clean Harbors is a provider of environmental and industrial services with operations in North America and India. The company offers hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. It also engages in the re-refining and recycling of used oil through its Safety-Kleen subsidiary.

Clean Harbors generated a net income of $203.2 million in 2021, up 50.7% compared to 2020. The company’s revenue rose 21.0% to $3.8 billion.

Shares of Clean Harbors are down about 7% this year, despite the market volatility. They are currently trading at a forward P/E ratio of 21.0x based on an earnings estimate for 2022.

5. Veolia Environnement SA (VEOEY)

  • Market capitalization: ‚ā¨18 billion
  • 2022 return: -20%

Veolia Environnement is a France-based provider of environmental services. It engages in air quality management, water treatment, waste collection and recycling, landfill and biogas recovery, desalination, energy production, industrial cleaning, and other services. 

Veolia Environnement‚Äôs¬†net income rose¬†166.1% to ‚ā¨554.9 million in 2021. Revenue for the year grew 9.6% to ‚ā¨28.5 billion. The company‚Äôs shares are currently trading at a forward P/E ratio of¬†16.6x¬†using an estimate for 2022 earnings.

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6. Li-Cycle Holdings Corp (LICY)

  • Market capitalization: $1.2 billion
  • 2022 return: -29%

Li-Cycle is a Canada-based¬†lithium-ion battery recycler. Its proprietary ‚ÄúSpoke & Hub‚ÄĚ recycling process converts battery manufacturing scrap and end-of-life batteries into black mass and other intermediate products. The black mass is then processed to produce critical battery materials, such as lithium carbonate, nickel sulfate, and cobalt sulfate.

Like other high-flying growth stocks without much revenue and no profits, LICY stock has not done very well. Shares are down 29% in 2022 so far. Those shares are currently trading at a forward enterprise value-to-revenue (EV/Revenue) ratio of 18.1x using an estimate for FY 2022 revenue.

7. GFL Environmental Inc (GFL)

  • Market capitalization: 12 billion CAD
  • 2022 return: -26%

GFL Environmental is a Canada-based environmental services company with operations throughout North America. It provides solid and liquid waste management services as well as infrastructure and soil remediation services. Those services include collection, transportation, transfer, recycling, and disposal services.

GFL shares are down 26% so far this year and are currently trading at a forward P/E ratio of 44.5x using an estimate for 2022 earnings.

8. Casella Waste Systems Inc (CWST)

  • Market capitalization: $3.6 billion
  • 2022 return: -16%

Casella Waste Systems is a solid waste services company. It provides solid waste collection and disposal, transfer, recycling, and organics services. The company offers these services to residential, commercial, municipal, institutional, and industrial customers throughout the northeastern United States.

Shares are down 16% this year, and the stock is currently trading at a forward P/E ratio of 68.4x based on an estimate of 2022 earnings.

9. PureCycle Technologies Inc (PCT)

  • Market capitalization: $1.3 billion
  • 2022 return: -20%

PureCycle Technologies is commercializing a patented purification recycling technology originally developed by Procter & Gamble. The technology is used for turning waste polypropylene, a plastic used in many consumer goods and packaging, into a resin capable of being reused as virgin polypropylene. The company is currently building its first recycling facility to implement the technology on a commercial scale. It expects to begin production in late 2022.

Pure Cycle is still in the very early stages of its growth as a company and does not generate any revenue or profit. They recorded a net loss of $77.5 million in 2021, widening the $53.0 million net loss reported in 2020.

The current market environment is not favorable to pre-revenue companies. Over the past year, PCT shares have fallen around 40%.

10. Cleanaway Waste Management Ltd (TSPCF)

  • Market capitalization: 6 billion AUD
  • 2022 return: -5%

Cleanaway Waste Management is an Australia-based waste management, industrial, and environmental services company. They provide waste collection, transfer, disposal, and recycling services. Cleanaway operates a network of waste management facilities, transfer stations, engineered landfill sites, liquid treatment plants, and refineries. 

But this is not a fast growing business. Sales were up about 3% in 2021 to 2.4 billion AUD.

11. Quantafuel ASA (QNTFF)

  • Market capitalization: $219 million
  • 2022 return: -43%

Quantafuel is a Norway-based recycling company that converts plastic waste into valuable products. It takes low-value waste destined for landfill sites or incineration plants and gives it a new life. The company’s Denmark-based plant engages in chemical recycling and its Norway-based plant conducts combined mechanical and chemical recycling.

However, this innovative company generates almost no revenue, and the stock is definitely very risky. Its recent performance has reflected that.

The waste management and recycling industry clearly needs to grow as the global population expands, generating more waste. Climate change makes reducing greenhouse gas emissions from landfills even more urgent.

ūüĒĒ As electric cars gain traction, more batteries – which contain valuable “green metals” – will need to be recycled. Learn what the top battery recycling stocks are.

Author: Matt Johnston

Matt is a finance and economics writer with seven years of professional writing experience, including over five years at Investopedia. He also sometimes teaches macroeconomics at St. Stephen’s University. But his intellectual interests are not limited to the world of finance and economics‚ÄĒhe also enjoys reading history and philosophy as well as learning new languages, both natural and programming. Matt currently lives in Montreal, Quebec.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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