Waste Management, Inc. (WM): Millions of North American’s Trash is Turning Into Investors’ Treasure

5). Waste-Based Renewable Energy: The company is the largest landfill gas to energy developer and operator in North America, and in 2011 commissioned six new facilities and three major expansions, and as of the end of that year possessed 131 active projects producing the equivalent of 615 MW of power.  Further expansion in this innovative industry could spark growth

Threats:

1). Rising Fuel Prices: A major increase in traditional gas or natural gas prices could squeeze the company’s margins and pose a major threat to the company

Competitors:

Major publicly traded competitors of Waste Management include Waste Connections, Inc. (NYSE:WCN), Republic Services, Inc. (NYSE:RSG), Clean Harbors Inc (NYSE:CLH), and Stericycle Inc (NASDAQ:SRCL). All of these companies operate in the waste management and collection industry and compete directly with Waste Management. Waste Connections is valued at $4.41 billion, pays out a dividend yielding 1.11%, and carries a price earnings ratio of 26.62. Republican is valued at $11.31 billion, pays out a dividend yielding 3.00%, and carries a price earnings ratio of 20.16. Clean Harbors is valued at $2.72 billion, does not pay out a dividend, and carries a price earnings ratio of 25.64. Stericycle is valued at $8.35 billion, does not pay out a dividend, and carries a price earnings ratio of 31.53.

The Foolish Bottom Line:

Financially, Waste Management is solid. The company possesses steady and reliable revenue growth, a growing dividend, and provides services that are considered necessities. The company’s debt load is outweighed by the predictability and security of their business. Looking forward, the company’s future is filled with stable growth and possible margin expansion due to the conversion of their fleet to natural gas. All in all, Waste Management is a recession proof business that should enjoy steady and solid returns for investors for decades to come.

The article Millions of North American’s Trash is Turning Into Investors’ Treasure originally appeared on Fool.com and is written by Ryan Guenette.

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