Two S&P 500 dividend stocks have underperformed the broader market over the past year. WM and Cintas have seen their share prices drop 10% and 14% from their 2025 highs, respectively. Both businesses remain robust, each possessing a strong competitive advantage.
WM, formerly known as Waste Management, operates 506 waste transfer facilities, 105 recycling centers, 262 active solid waste landfills, and 10 renewable natural gas facilities. It is the largest waste and recycling company in North America. The company's vertically integrated model allows it to profit from trash collection, selling recycled commodities, and creating renewable natural gas. Its extensive network is considered a valuable asset as landfills fill and communities resist new facilities.
Over the last two decades, WM has delivered total returns of 1,060%, outperforming the S&P 500's 680%. Following its Stericycle acquisition in 2024, the company is expanding into the medical waste industry. It is also automating recycling centers and building RNG plants. WM pays a 1.5% dividend yield and has raised its dividend for 22 consecutive years, with a recent 15% increase. The dividend uses about 50% of profits. The stock trades at 26 times forward earnings.
Cintas is the leading uniform rental provider in North America, with over 12,000 distribution routes. It operates in uniform rental, facility services, and first aid and safety services. The company consolidates a fragmented market through acquisitions, including a proposed $5.2 billion buyout of UniFirst, and by offering strong value to customers. It has achieved 9% annualized sales growth over the last decade.
Since 2015, Cintas has grown its net income margin from 9% to 18% and nearly tripled the S&P 500's total returns over the same period. The company has increased its dividend for 33 straight years, with payments growing 16% annually over the last decade. The stock trades at 40 times forward earnings.
The Motley Fool Stock Advisor analyst team recently identified 10 stocks they believe are the best for investors to buy now. WM was not on that list. The team noted that Stock Advisor's total average return is 955%, compared to 196% for the S&P 500. Josh Kohn-Lindquist holds positions in WM. The Motley Fool recommends Cintas and WM.