If anyone were to ask me what company represents the fight for a greener planet, I would have to say Waste Management Inc., (WMI-NYSE), trading just below $40 per share. Since 1894, this company has been taking out the trash and has recently built a respectable portfolio of solutions to profit from waste-to-energy implementation and recycling forethought.
I also have to admire any company that engages in a business that inherently gets the "dirty business" label, yet takes on the challenge and corporate bravado to actively clean up the waste of the world. Considering the fact that environmental awareness, regulations and scrutiny are increasingly dominating today's headlines, I like the company's long term prospects. I like the name so much, I vote for a government department called the Waste Management Agency, whereby Uncle Sam could be his own best customer.
How green is Waste Management?
Taken from the company's Website, Waste Management includes:
413 collection operations, 370 transfer stations, 283 active landfill disposal sites, 17 waste-to-energy plants, 131 recycling plants, 95 beneficial-use landfill gas projects and 6 independent power production plants. These assets enable Waste Management to offer a full range of environmental services to nearly 21 million residential, industrial, municipal and commercial customers.
We recover and process methane gas, naturally produced in landfills, into an energy source for generating power. We currently supply enough landfill gas to create more than 250 megawatts of green energy that could power about 225,000 homes or replace about 2 million barrels of oil per year.
With 495 vehicles now converted from diesel fuel to clean-burning natural gas, we operate one of the nation's largest fleets of heavy-duty trucks powered exclusively by natural gas.
We have taken a leadership role in promoting the recycling and reuse of materials that would otherwise end up in landfills.
Waste Management, combined with its wholly owned subsidiary WM Recycle America, is North America’s largest recycler. We process 5.8 million tons of commodities each year, saving approximately 41 million trees through paper recycling alone.
Through its waste-to-energy plants, WM uses solid municipal waste to generate power. This reduces the volume of the waste by 90 percent and saves space in local landfills while providing an economical alternative to the use of fossil and nuclear fuels.
WM partners with communities, government and industries to redevelop closed landfill sites into recreational and commercial facilities such as parks, athletic fields, campgrounds and golf courses.
Across North America, we work with environmental groups to set aside land to create and manage wetlands and wildlife habitats. Our landfills provide more than 16,000 acres of protected land for wildlife; 15 landfills are certified by the Wildlife Habitat Council.
WM helped found the Chicago Climate Exchange, an organization established to provide a voluntary marketplace for reducing and trading greenhouse gas emissions.
The stock suffered dearly following an accounting scandal and management shakeup in the summer of 1999, but has since recovered to a solid track record of growth and shareholder value.
I believe this is the best area to execute entries into the stock, however I do have an uneasy feeling that stock prices are due for a further pullback. Watch the stock over the course of the next couple of months for any pullbacks which will offer a chance to get in for the long term (1-3 years), where I can see this stock north of $50 per share based on their existing growth rate for the last couple of years.
For now, the company pays an investor a 2.50% annual yield in dividends and trades at a discount to its industry peers. So for investors looking to "clean up," Waste Management makes it their business.