Waste Management (
) isn't just taking out the trash -- it's turning trash into
renewable energy as well as steady earnings and dividends for
On April 24 before the open, the Houston-based garbage hauler
reported a first-quarter profit of 49 cents a share, up 23% from
the prior year and above views. That marked its best quarterly
growth in years. Revenue grew 2% to $3.4 billion, in line with
Its three- and five-year Earnings Stability Factor is 2 and 3,
respectively, on a scale of 0 (calmest) to 99 (most erratic).
Annual profit fell slightly in 2009 and 2012, but otherwise it
has increased 3% to 14% since 2004. Analysts expect 9% gains this
year and next.
Waste Management in February increased its quarterly dividend
to 37.5 cents a share, doubling the amount from 2004. It works
out to $1.50 for the year, or a 3.4% yield on an annualized
basis, outpacing the S&P 500's 1.9%.
While that payout makes income investors happy, Waste
Management's "think green" initiative may appeal to
environmentalists. It takes naturally occurring landfill gas from
disposal sites and converts it to energy that can power homes and
In fact, CEO David Steiner last week told CNBC that Waste
Management generated 9.82 million megawatt hours (mwh) of energy
in 2013. The solar industry produced 9.25 million mwh last year,
according to Energy Information Administration data.
The refuse hauler estimates that the renewable energy that it
generates from its landfills can power some 1.2 million homes,
and aims to produce enough to power more than 2 million homes by
2020. A California plant even converts landfill gas into
liquefied natural gas, used to power its trucks in certain
The stock rose 2% in heavy volume after its earnings report,
rising above its 200-day moving average to start the right side
of a shallow cup base with a potential 46.48 buy point. It's 4%
off its high.