On August 1, 2011 I wrote that investors should take advantage of Waste Management’s yield (Time To Take Advantage of Waste Management’s Yield) which was above 4%. Ironically, the stock was trading at $ 31.50 at the time I wrote that article, which is the same price it closed at on Friday. In the meantime Waste Management hit a 52 week low of $ 27.75 before shooting up to a recent high of $ 34.68. Despite the stock’s volatility, one thing remains stable, an excellent dividend yield.
Once again Waste Management’s yield has been pushed above 4% on recent price weakness. The company reported Q3 earnings on October 27th. Earnings per share came in at $ 0.63, better than the $ 0.61 expected. Revenue of $ 3.52 billion was slightly better than expectations. Waste Management also reaffirmed its (lowered) full year 2012 EPS guidance of $ 2.14-$ 2.18. Despite the solid report, the stock sold off. As stocks often do, Waste Management has given investors a second opportunity to buy in at a high dividend yield.
Shares of Waste Management trade at 13.35 times forward earnings. Waste Management’s price/sales ratio is a reasonable 1.11. The quarterly dividend has grown at an annualized rate of 4.3% over the last five years. The dividend is comfortably covered with a payout ratio of 65%.
As I wrote previously, a high, sustainable dividend yield can support a stock’s trading price. Waste Management’s yield is virtually double that of a ten year treasury note. Although not recession proof, garbage collection and management is recession resistant. Waste Management is the largest waste management company in the United States. The company has a history of swallowing smaller competitors to add volume and reduce competition.
The bottom line is that the market has given investors another opportunity secure a stable 4% yield in a “best of breed” company.
Disclosure: I am long WM.
From our Blog
- Why You Need a Dumpster September 21, 2016
- Neighborhood Togetherness Matters & Clean Up Does, Too September 19, 2016
- What Waste Should You Recycle And Throw In The Trash? August 3, 2016
- Dumpster Rentals for Business Owners August 1, 2016
- Picking a Dumpster for Your Next Roofing Project July 19, 2016
- Consequences of Illegal Dumping and Littering July 13, 2016
- How To Dispose Of Debris? June 14, 2016
- When Is A Good Time To Clean Out Your Waste? June 13, 2016
- How to Dispose of Construction Waste May 2, 2016
- Why You Should Share Rental Dumpsters With Your Neighbors April 29, 2016
2011 2012 Announces best Call Clean Company Conference Connections Covanta diving dumpster dumpsters Energy Ewaste Garb garbage Harbors Holding Identity Inc. Industry Landfill Management Plant power Present Progressive Recycling Release Rental Reports Republic Second Services Solutions Stericycle stock Third TRASH TriTech Veolia Waste yard Year
- Dumpster Diving for Gourmet Pig Feed – Novella Carpenter July 10, 2011
- A Shout Out To Eating Garbage: Dumpster Diving on CBC September 17, 2011
- MythBusters – Dumpster Diving Trailer July 16, 2011
- Kris Kemp: Dumpster Diver August 21, 2011
- What should happen after my character gets beat up? June 6, 2011
- Frugal TV – Dumpster Diving for Coupons June 11, 2011
- Dumpster Dive (Director Commentary) September 24, 2011
- Dumpster Divers Spark Palin Probe September 11, 2011
- Auburn-Placer 1 yard dumpster June 8, 2011
- Can Opener? We don’t need no stinking can opener! June 19, 2011