The valuation gap is difficult to justify on returns alone: WM's ROIC of roughly 3-4% in recent quarters sits far below RSG's 13.5%, yet WM trades at a higher EV/EBITDA (15.66x versus 13.91x) and a materially higher P/B (9.54x versus 6.14x). The 2.56 PEG ratio, alongside a forward P/E of 29.09 versus TTM 35.2, implies consensus expects mid-teens earnings growth, which may be achievable if Stericycle synergies and RNG scaling materialize, but appears to leave little tolerance for integration stumbles. Investors should also note the P/FCF of 33.47, which suggests even the cash-based valuation is not obviously cheap relative to the 1.4% dividend yield on offer.

The durability of the 18.7-18.9% operating margin across the last four reported quarters is encouraging and likely reflects genuine overhead leverage, as SG&A held near $655-707M while revenue grew to $6.8B. However, the absence of a reported gross margin for 2026Q3 and the unexplained step-change in the COGS line warrant verification before treating the improvement as structural; if the shift reflects changed cost classification rather than mix or automation gains, the apparent margin expansion may not be repeatable. Net margin volatility between 9.4% and 13.5% over the ten-quarter window, against a steadier operating income trajectory, suggests non-operating items are distorting bottom-line comparisons quarter to quarter.

The trajectory is directionally positive, with ROIC rising for four consecutive quarters and net margin recovering to 12.0%, but the absolute level of roughly 4.4% still trails typical industrial WACC estimates of 7-8%, suggesting returns on invested capital have not kept pace with the asset build driven by acquisition. ROE tells a more flattering story, ranging from 6.4% to 9.9%, but that figure is flattered by buybacks that have compressed equity to $9.9B against $18.0B of retained earnings, rather than by superior earning power. It is also worth noting that landfill airspace depletion and asset retirement obligation accounting can depress reported invested capital and distort these ratios; the underlying economic return on the permit-locked landfill network may therefore exceed the accounting ROIC, though quantifying that adjustment requires disclosures beyond the ratio set provided.

The gradual deleveraging from a peak D/E of 2.90 appears genuine through 2026Q2, driven by equity accretion from retained earnings and the rebuild to $9.9B, but the sudden drop to 0.15 in 2026Q3, alongside a D/EBITDA of 0.74 versus 11.51 in the prior quarter, is inconsistent with the reported capital structure and appears to be a data artifact rather than an operational event; investors should verify against the latest 10-Q before drawing conclusions. Interest coverage trending from 8.60x in 2024Q3 to a 4.4-5.4x range across 2025 and 2026 suggests debt service capacity has tightened, likely reflecting higher absolute debt levels from the Stericycle consolidation and the interest rate environment. Debt/EBITDA in the 11-14x range on trailing figures is elevated versus the sub-3x levels typical of investment-grade industrials, though it may be inflated by purchase accounting and depreciation conventions specific to the waste sector; covenant or refinancing risk does not appear imminent given coverage above 4x, but the cushion is thinner than historical norms.

The turnover decline appears driven primarily by the balance sheet expansion to $46.5B rather than revenue weakness, since PP&E and goodwill together now constitute roughly 75% of assets, meaning the ratio is diluted by acquisition accounting more than by operating deterioration. The DSO creep from 48 to 59 days is the more notable signal; while a sub-23-day cash conversion cycle remains favorable in absolute terms given WM's 44-45 day payables stretch, the eleven-day receivables elongation could reflect mix shift toward commercial or Stericycle-linked accounts and warrants monitoring for credit quality or billing delays. The 2026Q3 data is incomplete for DIO, DPO, and CCC, so the latest-quarter working capital position cannot be fully assessed from the figures supplied.