“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
A five-year holding period can be a useful test of how a business compounds value beyond short-term market noise. For investors evaluating Waste Management, Inc. (NYSE: WM), the results since mid-2021 illustrate the combined effect of share price appreciation and dividend reinvestment. An investor who bought WM shares on 08/04/2021 and simply held through 08/03/2026 would have generated a solid total return, with the ending value materially above the original investment.
WM 5-Year Return Details
| Start date: | 08/04/2021 |
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| End date: | 08/03/2026 | ||||
| Start price/share: | $148.86 | ||||
| End price/share: | $226.43 | ||||
| Starting shares: | 67.18 | ||||
| Ending shares: | 72.61 | ||||
| Dividends reinvested/share: | $14.74 | ||||
| Total return: | 64.42% | ||||
| Average annual return: | 10.46% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $16,444.67 | ||||
The numbers are straightforward: a $10,000 investment in Waste Management stock on 08/04/2021 grew to $16,444.67 by 08/03/2026, assuming dividends were reinvested. That equates to a 64.42% total return and an average annual return of 10.46%. [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What Drove WM’s Total Return
Waste Management’s five-year result came from two sources:
- Share price appreciation: the stock rose from $148.86 to $226.43 per share.
- Dividend income: WM paid $14.74 per share over the period, with those cash distributions assumed to be reinvested into additional shares.
That distinction matters. Price return shows what the market paid for the stock at the beginning and end of the period. Total return captures the full economic outcome, including cash distributions. For companies with established dividend programs, the gap between price return and total return can become meaningful over multi-year holding periods.
In this case, reinvestment increased the share count from 67.18 shares to 72.61 shares. That incremental ownership helped compound returns over time, particularly as later dividends were paid on a larger base of shares.
Why Waste Management Often Screens as a Long-Term Compounder
Waste Management operates in a defensive corner of the industrial and environmental services landscape. The company benefits from recurring demand tied to waste collection, transfer, disposal, and related services. That business model has historically supported relatively predictable cash generation compared with more cyclical industries.
Another factor is asset intensity. Landfills, collection networks, transfer stations, and route density can create operating advantages that are difficult to replicate at scale. In practical terms, that can support margins, recurring free cash flow, and a capacity to return capital through dividends and buybacks, while still investing in the business.
Those characteristics help explain why WM has often been viewed less as a high-growth story and more as a steady compounding business: modest but durable growth, recurring cash flow, and disciplined capital returns.
Dividend Yield and Yield on Cost
Based on the most recent annualized dividend rate of $3.78 per share, WM has a current yield of approximately 1.67%, using the ending share price of $226.43.
Another useful measure is yield on cost, which compares the current annualized dividend to the original purchase price. Using the 08/04/2021 entry price of $148.86, WM’s current annualized dividend of $3.78 implies a yield on cost of about 2.54%.
Yield on cost does not indicate what a new investor would earn at the current market price, but it does show how a growing dividend can improve the income profile of a long-held position.
Key Takeaways From a 2021 WM Investment
- Initial investment: $10,000
- Ending value: $16,444.67
- Total return: 64.42%
- Annualized return: 10.46%
- Return drivers: a higher share price plus reinvested dividends
The broader lesson is that a stock like Waste Management does not need dramatic volatility or outsized headline growth to produce respectable long-term results. Over a five-year period, steady business performance, dividend payments, and disciplined reinvestment were enough to turn a routine holding into a meaningful compounding outcome.
“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” — T. Boone Pickens
