Since 2000, power outages affecting 50,000+ customers have become more common, growing from just 16 in 2000 to nearly 77 last year (and 139 in 2011). That’s partly due to more storms like last fall’s Hurricane Sandy, but it’s also due to an aging power grid.
As a result, the 54-year-old company’s been able to grow revenue by nearly 35% annually and net income by 47% annually for the past three years. It’s the market leader, supplying 70% of the generators sold to residential customers. Plus, it’s expanding internationally with recent purchases in Latin America and Europe and focusing more sales efforts on small businesses that cannot afford to lose power (think food storage at restaurants).
If you want to invest in the housing recovery and/or electrical industry, consider Generac Holdings Inc. (NYSE:GNRC).
Justin Loiseau: If you surf through Fool.com or dumpster dive in your spare time, chances are you’ve come across Waste Management, Inc. (NYSE:WM). While the name implies otherwise, this company is far from a piece of trash.
With 43,000 employees and $23 billion in assets at its disposal (pun intended), this corporation is the player in the waste management sector. The global recession resulted in stagnating sales over the past five years, and near misses on quarterly earnings over most of the last three years caused the share price to underperform. For the long-term investor, that spells v-a-l-u-e.
With housing markets picking up and an American recovery well under way, waste volume is set to soar in the next few years. But Waste Management, Inc. (NYSE:WM) takes the second word in its name seriously, and is innovating to find interesting (and profitable) ways to deal with America’s trashiness. From new recycling methods to methane capture systems, your trash is this company’s treasure.
I’ve picked up shares myself three separate times in 2013, and believe that my 13.5% gains have only just begun to scratch the surface of this stock’s sustainable soar. With above-average margins, an envious return on equity, and a delectable 3.6% dividend yield to boot, it’s high time you dump some shares of Waste Management, Inc. (NYSE:WM) straight into your portfolio.
Dan Caplinger: My stock for the month is student-loan financing company SLM Corp (NASDAQ:SLM) , which is the company behind the Sallie Mae brand name. Sallie Mae bills itself as the No. 1 financial services company specializing in education, and the company manages and services hundreds of billions of dollars in student loans. Even as American households have been reducing their overall debt levels substantially in the years since the financial crisis, student-loan debt levels have continued to rise, and that puts Sallie Mae squarely in a high-growth industry.
But the reason Sallie Mae is interesting now is that the company said recently that it would split itself into two separate publicly traded companies. One will focus on its current education-loan management business and will take on the lion’s share of the existing company’s assets, reaping income from servicing fees and other management-related revenue.
The other will offer consumer-banking services, including its online banking service, and will also originate student loans to serve borrowers directly as well as managing the company’s Upromise Rewards college-savings program. With expectations that the spinoff will be complete by mid-2014, owning shares now could give investors two ways to benefit well into the future.
Paul Chi: Looking for the next Berkshire Hathaway? Loews Corporation (NYSE:L). fits the bill. This company boasts diversified business lines such as hotels, oil and gas production, natural gas pipelines, offshore drilling, and property and casualty insurance. Best of all, it’s led by CEO Jim Tisch, who works tirelessly to allocate capital to the best growth opportunities within its portfolio of businesses.
Loews has been a long-term compounding machine, beating the market over the past 10, 20, and even 50 years. Despite this long history of outperformance, it still trades at a discount to its book value of $49.36 because of the still-ongoing turnaround situation at Cna Financial Corp (NYSE:CNA), its publicly traded insurance subsidiary. The company likely also suffers from a case of the conglomerate discount, in which a company with many parts is undervalued by the market.
Discount or no, businesses with superior capital allocators are tough to find, and Loews Corporation (NYSE:L) has proved itself trustworthy as a steward of shareholder capital for many decades. With its wealth of reinvestment opportunities (as well as a conglomerate discount letting management buy back shares on the cheap time and again), Loews Corporation (NYSE:L) represents an interesting investment opportunity for the value-minded investor.
Sean Williams: It’s not a name that many investors would think of when it comes to a big growth opportunity, but as September rolls around I feel everyone should have their eyes on Xerox Corporation (NYSE:XRX).
I know what you’re probably thinking, “Isn’t Xerox Corporation (NYSE:XRX) still a stodgy printing company?” In actuality, it isn’t. As of Xerox’s most recent quarter, the bulk of Xerox Corporation (NYSE:XRX)’s revenue — 55%, to be exact — now comes from its services segment which includes printing services, as well electronic toll booth operation and Medicaid processing.
The emphasis here would be on Xerox Corporation (NYSE:XRX)’s Medicaid processing services which on Oct. 1 could see a gigantic ramp-up in volume. The reasoning behind the volume boost is the Patient Protection and Affordable Care Act — you may know it better as Obamacare — which will expand government-sponsored Medicaid to some 16 million new people through the remainder of the decade. In California alone, 1.4 million new persons are expected to qualify. With Xerox Corporation (NYSE:XRX) processing all of California’s Medicaid claims, it could be in for a dramatic growth surge that few are anticipating. At less than nine times forward earnings you don’t have to pay much to own Xerox Corporation (NYSE:XRX) and you also get a 2.3% yield to boot. Do you copy that? Over!
The article Roundtable: 1 Stock to Buy in September originally appeared on Fool.com is written by Motley Fool Staff.
The Motley Fool recommends Accenture, AMC Networks, Berkshire Hathaway, Loews, Netflix, Walt Disney, and Waste Management. The Motley Fool owns shares of Berkshire Hathaway, Generac Holdings, Loews, Netflix, Walt Disney, and Waste Management.
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