In this week’s episode of Waste360’s NothingWasted!, we chat with Michael E. Hoffman, managing director and group head of diversified industrials, Stifel Financial Corp.
We spoke with Hoffman about current and coming trends in the waste industry, the outlook for M&A, how the new administration could impact waste, and more.
Here’s a sneak peek into the chat:
Waste360: How do you think the recent administration change might affect the waste and recycling industry?
Hoffman: As far as principles that are going to underline actions: climate is right at the top of the list. Things like going back to the Paris Agreement or…stopping the Keystone Pipeline; none of those are going to have particularly meaningful influences to the solid-waste industry. Even actions around greenhouse gases…solid waste is an early adopter of alternative-fuel vehicles…so the industry is well down this path. Incremental changes around PFAS will set a bar, but the bigger impact will be at the state level and regarding the definition of “who is a generator?”
Waste360: How do you see environmental justice developments impacting the industry?
Hoffman: Environmental justice will be interesting because it is also mostly about the definition. There’s no resistance from the waste industry; what they need is a clear definition so they can come at it with good data and analysis and have effective dialogue. And that doesn’t exist at the moment at the federal or state level. The risk, in our view, is you get too general of a definition… and we have to avoid that.
Waste360: What are you expecting on the next round of earnings calls?
Hoffman: Fourth-quarter results are going to be good. And what’s interesting…garbage is deemed “defensive;” it is highly recurring, repeatable profitability that’s not sensitive to a cycle that’s unfolding until way late into the cycle. What’s been happening in the stock market since about September is that strategists have been saying you should rotate out of defensive stocks. But what garbage is experiencing right now I would categorize as what looks like new-business formation. And I think the fourth quarter will surprise the market.
Waste360: What challenges and opportunities do you see for the industry regarding the environmental element of “ESG”?
Hoffman: I think this is not a fad; I think this is here to stay — within the investment world for sure, but I think it becomes part of our walking, talking dialogue as citizens too. We all are going to talk about this more often. And the garbage industry has been doing things that are very beneficial to human health and the environment for decades, and never talked about it. So we’re emphasizing that this needs to be part of [their] daily dialogue — figure out how to measure it, so you have a data set you can disclose that’s defensible.