My Top 2 Stocks: Berkshire Hathaway Inc. (BRK.A) and Waste Management, Inc. (WM)

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Waste Management truly is the leader in the American (NYSE:AXP) trash-hauling business. Not only are its ubiquitous green trucks everywhere hauling the trash, but it also owns or operates 269 landfills, the largest network in its industry. Its next largest competitor, Republic Services, Inc. (NYSE:RSG) , isn’t too far behind, with 191 solid-waste landfills.

The ownership of so many landfills makes it difficult for Waste Management customers to switch its trash service. While any municipality can decide to haul its own trash, it could be exceedingly difficult for them to start their own landfills. That gives Waste Management, Inc. (NYSE:WM) a moat of sorts in its industry, protecting it from a lot of direct impact to its primary business. Finally, because construction tends to generate a lot of trash, Waste Management is poised to continue doing well, especially as commercial and residential construction continues to improve over the coming year.

Beyond its business, however, one of the reasons I’m glad to own shares of the company is its dedication to dividends. It recently boosted its dividend for the 10th year in a row, resulting in a yield near 4%. Because of this dividend, as well as its position as leader in its industry, I also plan on adding to my holding to Waste Management, firmly entrenching it as the second largest holding in my portfolio.

Two industry leaders
You can’t go wrong with investing in companies that lead their respective industries, which is something my top two holdings reflect. Berkshire Hathaway is a leader in the insurance business but also is one of the best allocators of capital in the market today. Waste Management, Inc. (NYSE:WM), on the other hand, leads the U.S. waste industry, both in regard to hauling trash and disposing of it. Hopefully, these companies will continue to drive the performance of my portfolio for many years.

The article My Top 2 Stocks: Berkshire Hathaway and Waste Management originally appeared on Fool.com and is written by Robert Eberhard.

Fool contributor Robert Eberhard owns shares of Berkshire Hathaway, Waste Management, and Ford. The Motley Fool recommends American Express, Berkshire Hathaway, Coca-Cola, Ford, Republic Services, Waste Management, and Wells Fargo and (NYSE:WFC) owns shares of Berkshire Hathaway, Ford, IBM, Waste Management, and Wells Fargo.

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