These days it's tougher to find a competitive yield without
taking on too much risk. Waste collectorsWaste Management (
) andRepublic Services (
) carry above-market yields and offer lower volatility.
Waste Management currently pays 36.5 cents a share each
quarter or $1.46 on an annual basis. It yields about 3.3%,
compared to 2.41% for the S&P 500. The company has steadily
increased its shareholder dividend over the years. Waste
Management's dividend has nearly doubled since 2004.
Republic Services pays stockholders 26 cents a share each
quarter or $1.04 annually. The company last bumped up its
dividend by 11% to the current rate in July. The current yield is
3%. The firm's dividend has sharply increased from just 4 cents a
share about 10 years ago.
Both are among the highest-yielding stocks in IBD's
Pollution-Control group. Waste Management has the second highest,
while Republic Services has the third-best yield.
Both stocks have betas below 1, meaning they have fewer ups
and downs than a general market index such as the S&P 500,
which has a beta of 1.0.
Revenue growth at both companies accelerated in recent
quarters. Waste Management's sales growth has picked up to 5% in
Q3 from 1% in Q1, helped by, in part, higher fuel surcharges and
higher collection yields. Republic Services' top-line growth
climbed to 6% in the third quarter, lifted by higher yields and
fees. That marked its biggest gain in years. Sales edged up 1% in
Q1 and 2% in Q2.
Waste Management has pulled back into buying range from a
43.69 buy point in a flat base. It retreated in some heavy
volume, which is not ideal. But the stock went through a solid
period of accumulation from late October to late November.
Republic Services has shaped a saucer-with-handle-like base
with a 35.39 buy point.