'Waste-full' Is Good for the Long Haul
As one of the great First Ladies, Eleanor Roosevelt wrote, "Yesterday is history, tomorrow's a mystery and today is a gift. That's why it's call 'the present'." That's true for every one of us in every moment of our lives. Today I'll share with you "a gift" that will keep on giving as long as there are humans.
In America, we throw away 195 million tons of trash and garbage each year. Evidence suggests that each American generates almost five pounds of trash every day. Yes, we are also fairly adroit at recycling, but humanity seems more predisposed to the generation and disposal of mountains of waste.
The "gift" in that knowledge involves a handful of publicly traded companies who make billions of dollars picking up and sorting through our tons of trash, as well as recycling most recyclable materials. One of the biggest and most prolific of these companies is Waste Management (WM) with its generous dividend yield of around 4.4%.
WM is waste-full in the sense that every day its trucks, containers and dumpsters are filled to overflowing with lots and lots of garbage and trash. Unless we want the rats and cockroaches to take over, companies like WM will be very much needed and paid accordingly.
The company is also committed to waste-to-energy and landfill gas-to-energy facilities in the U.S. This sometimes doesn't catch the media's attention, but WM continues to practice a form of sustainable energy production.
This includes capitalizing in landfill gas-to-energy operations where WM is recovering methane gas produced naturally as waste decomposes in landfills for use in the generation of electricity. They are understandably proud of this and their recycling emphasis as you can see at their user-friendly Web site .
WM's collection services include picking up waste and recyclable materials and transporting both to a transfer station, material recovery facility or disposal site. Their extensive recycling operations include materials processing, plastics materials recycling and commodities recycling.
In addition, it provides recycling brokerage services consisting of managing the marketing of recyclable materials for third parties. A growing niche is their electronic recycling services, which involves the collection, sorting and disassembling of discarded computers, communications and other electronic equipment.
After the markets closed on Tuesday, Waste Management announced their latest quarterly cash dividend of 35.5 cents per share payable Dec. 14 to stockholders of record on Nov. 28, 2012. This $1.42 annual dividend represents a rather lofty 70% payout ratio of the company's earnings.
Due to that fact and also that their five-year expected PEG ratio has swelled to 2.58, I'd rather keep an eye on this company to see how their next quarter's earnings and revenue growth unfolds. Their last quarter saw a year-over-year 21.58% decrease in earnings, with quarterly revenues falling by almost 2%.