Republic Services (RSG) Operational Quality Rating (AA) | 2025 Old York Registry

(AA) | Industrials | Waste Management
By: Old York Financial
A Private Principal Report

the verdict

Old York Financial has assigned Republic Services (RSG) an Operational Quality (AA) Rating.

Republic Services is the second-largest waste player in North America, but in the specific geographies it serves, it is often a functional monopoly. Their 2025 performance was defined by extreme pricing power, as they pushed through 5.9% price increases to offset a slight dip in organic volume.

The business cleared our 15% ROIC hurdle (estimated at ~15.5% on an adjusted basis), a major feat for a company that must own and maintain 208 active landfills and a fleet of 17,000 trucks. They are a Tier-1 Equity Retraction engine, returning $1.6 Billion to shareholders in 2025.

the old york analysis

owner earnings: the recurring trash tax

Waste collection is the ultimate "Subscription for the Physical World." People do not stop producing trash, even in a recession.

• 2025 Total Revenue: $16.59 Billion (Up 3.5% YoY)

• 2025 Net Cash from Operations: $4.30 Billion

• (-) Maintenance CapEx: ($1.92 Billion)

• (+) Depreciation & Amortization: ~$1.90 Billion

• OLD YORK OWNER EARNINGS: $4.28 Billion

• Analyst Note: While CapEx is high ($1.9B), a significant portion is "Growth CapEx" for landfill expansions and RNG (Renewable Natural Gas) plants. The cash conversion remains exceptionally high for an industrial.

the equity retraction (share retirement)

• The Dividend Growth: They increased the quarterly dividend by 8% in 2025.

• 2025 Performance: Repurchased $854 Million in shares.

• Dividends: Paid $738 Million in cash.

• The Verdict: Total shareholder return of $1.6 Billion. They are a disciplined consistently reducing the float to amplify the value of our principal stake.

operational efficiency

• ROIC: ~15.5% (Adjusted; clearing our 15% Yardstick floor for the first time in recent years).

• Net Profit Margin: 12.9% (A healthy 13.2% in Q4).

• Operating Margin: 19.3% (GAAP; Adjusted EBITDA margin hit a record 32.0%).

• EPS Growth (1-Year): +8.7% (Adjusted EPS of $7.02).

the fortress check

• The Moat: Landfill permits are the ultimate barrier to entry. "Not In My Backyard" (NIMBY) sentiment makes it nearly impossible for a new competitor to open a landfill. Republic owns the destination, forcing competitors to pay them "tipping fees."

• Pricing Power: High. Core price on related business revenue increased 7.1% in 2025. They are successfully decoupling their revenue from volume fluctuations.

• Vertical Integration: They own the collection trucks, the transfer stations, and the landfills. They capture the margin at every stop of the trash’s journey.

why it’s rated (AA)

• Recession-Proof: 80% of their revenue is under multi-year contracts with built-in price escalators.

• Capital Velocity: They have successfully pivoted from a "low-return utility" to a "high-return compounder" by optimizing routes and expanding into high-margin environmental services.

• The Cap: The $1.9B in annual CapEx and the heavy debt load ($12.5B) required to maintain the "Holes in the Ground" prevents a (AAA) rating.

final determination

Rating: Old York Quality (AA)

Classification: The Landfill Sovereign.

Republic Services is a "Compounder of Necessity." It receives a (AA) because it dominates the most essential niche in the industrial economy and has finally pushed its capital velocity above the 15% threshold we demand for elite status.

Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager.