Montrose Environmental Group (NYSE:MEG) versus Waste Management (NYSE:WM) Head to Head Review

Waste Management (NYSE:WM) and Montrose Environmental Group (NYSE:MEG) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Analyst Recommendations

This is a breakdown of recent recommendations for Waste Management and Montrose Environmental Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Management	0	9	13	2	2.71
Montrose Environmental Group	0	2	4	0	2.67

Waste Management currently has a consensus target price of $255.17, indicating a potential upside of 17.77%. Montrose Environmental Group has a consensus target price of $32.50, indicating a potential upside of 13.84%. Given Waste Management’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Waste Management is more favorable than Montrose Environmental Group.

Earnings & Valuation

This table compares Waste Management and Montrose Environmental Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waste Management	$22.06 billion	3.96	$2.75 billion	$6.74	32.15
Montrose Environmental Group	$696.40 million	1.45	-$62.31 million	($1.51)	-18.91

Waste Management has higher revenue and earnings than Montrose Environmental Group. Montrose Environmental Group is trading at a lower price-to-earnings ratio than Waste Management, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Waste Management has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Montrose Environmental Group has a beta of 1.84, indicating that its stock price is 84% more volatile than the S&P 500.

Profitability

This table compares Waste Management and Montrose Environmental Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waste Management	11.36%	34.37%	6.91%
Montrose Environmental Group	-5.10%	0.46%	0.21%

Insider & Institutional Ownership

80.4% of Waste Management shares are owned by institutional investors. Comparatively, 87.9% of Montrose Environmental Group shares are owned by institutional investors. 0.2% of Waste Management shares are owned by insiders. Comparatively, 11.9% of Montrose Environmental Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Waste Management beats Montrose Environmental Group on 12 of the 15 factors compared between the two stocks.

About Waste Management

Waste Management, Inc., through its subsidiaries, engages in the provision of environmental solutions to residential, commercial, industrial, and municipal customers in the United States and Canada. It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (MRF), or disposal site; and owns and operates transfer stations, as well as owns, develops, and operates landfill facilities that produce landfill gas used as renewable natural gas for generating electricity. As of December 31, 2022, the company owned or operated 254 solid waste landfills, five secure hazardous waste landfills, 97 MRFs, and 337 transfer stations. It also provides materials processing and commodities recycling services at its MRFs, where cardboard, paper, glass, metals, plastics, construction and demolition materials, and other recycling commodities are recovered for resale or redirected for other purposes; recycling brokerage services, such as managing the marketing of recyclable materials for third parties; and other strategic business solutions. In addition, the company offers construction and remediation services; services related with the disposal of fly ash, and residue generated from the combustion of coal and other fuel stocks; in-plant services comprising full-service waste management solutions and consulting services; and specialized disposal services for oil and gas exploration and production operations. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is headquartered in Houston, Texas.

About Montrose Environmental Group

Montrose Environmental Group, Inc. operates as an environmental services company in the United States, Canada, and internationally. The company operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. The Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments; environmental emergency response and recovery; toxicology consulting and environmental audits and permits for current operations; facility upgrades; new projects; decommissioning projects; and development projects. This segment also offers technical advisory and consulting services, including regulatory compliance support and planning, environmental, ecosystem and toxicological assessments, and support during responses to environmental disruptions. The Measurement and Analysis segment tests and analyzes air, water, and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna, and human health. Its services include source and ambient air testing and monitoring, leak detection, and advanced analytical laboratory services, such as storm water, wastewater, and drinking water analysis. The Remediation and Reuse segment provides engineering, design, implementation, and operations and maintenance services primarily to treat contaminated water, remove contaminants from soil, or create biogas from waste. The company serves financial, oil and gas, utilities, construction, automotive, real-estate, midstream energy, manufacturing, commodities, petrochemical, food and beverage, telecommunications, and engineering industries, as well as local, state, provincial, and federal government entities. Montrose Environmental Group, Inc. was founded in 2012 and is headquartered in North Little Rock, Arkansas.