Waste Management, Inc. (NYSE:WM)

CAPS Rating: 5 out of 5

Provides waste management services (municipal, commercial, industrial and residential)in the United States, Canada and Puerto Rico. Services include collection, transfer, recycling and resource recovery services, and landfill disposal of hazardous wastes.


Player Avatar dvcnut (92.57) Submitted: 11/28/2012 2:47:10 PM : Outperform Start Price: $30.57 WM Score: +6.27

There is a lot to like about Waste Management. Their 5 year dividend growth rate is approximately 8% and currently yields almost 4.5%, well above their 5 year average of 3.5%. They generate a ton of cash ($0.16 for every $1 in market cap) and return a lot of it to the shareholders. They continue to expand their waste-to-energy business which should help keep the revenues and earnings growing. I also really like their corporate conduct, requiring members on the board of directors and executive management to have high levels of stock ownership, restrictions on selling stock, and to me, good criteria for determining bonuses such as operating earnings growth and margins. The chairman of the board is separate from the CEO. This may not be a flashy, high-growth company, but it looks like a steady growing one, a company that would interest Peter Lynch.

Report this Post 5 Replies
Member Avatar useless33 (65.43) Submitted: 11/28/2012 8:22:36 PM
Recs: 0

nice write-up. I agree, though debt levels are not what my perfect company would be. I'm holding my shares.

Member Avatar 6sigmaford (23.52) Submitted: 12/12/2012 8:51:45 AM
Recs: 0

Good points. I have my eye on them for a pullback due to cliff issues. However, they are an aggressive cost controller, and are not terrified of innovation. I watch their trucks role by my house with a single operator where there used to be (3) a few years back.

Member Avatar dvcnut (92.57) Submitted: 12/17/2012 2:01:19 PM
Recs: 0

Yes, I don't like the debt position either, but I felt it was manageable as they have very good interest coverage, and with their cash generation they could pay off all their debt in 5 years (ignoring capex and the all important dividend payouts, but is just a figure I like to look at). My goal for WM is to continue increasing their dividend. They just announced a dividend increase of only 2.8%, which is pretty low. It's definitely something I'll keep an eye on.

Member Avatar trackjakeambrose (57.54) Submitted: 12/27/2012 12:48:51 PM
Recs: 0

i think a big aspect people ignore is their increasing recycling. for points here, idk. i am going to trade in and out of them for points. in real life they are a great foundational investment as well as defensive in bad times

Member Avatar RedScourge (25.36) Submitted: 12/30/2012 8:13:17 PM
Recs: 0

I was holding this for a while as I saw them as a pretty good potential investment compared to the others in their sector, but it sat there and did almost nothing, so I got out of it. A 4% dividend fine, but when I could earn more money by having owned a total market index ETF like VTI over that same time period, it stops looking so appealing.

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