Republic Services Group ( RSG ) keeps taking out the trash and converting it into dividends for income investors.
The company, incorporated in 1998, has grown through mergers and acquisitions to become one of the biggest solid waste collectors in the U.S., second only toWaste Management ( WM ). It had been the No. 3 player until 2008, when it bought rival Allied Waste Industries for $6.1 billion.
After the merger was announced in July that year, Waste Management made an unsolicited offer to buy Republic Services, which was rejected. Republic turned down a second attempt from Waste Management to thwart the merger by sweetening its bid.
After the Allied merger was completed in December 2008, Republic moved its headquarters from Florida to Phoenix, where Allied was based.
Now Republic provides waste and trash disposal services through more than 800 local sites in the U.S. and Puerto Rico to more than 13 million customers. It also operates more than 75 recycling centers, and provides related collection services for electronic recycling, household hazardous waste, yard waste and medical sharps, among others.
The waste hauler in July announced an increase in its quarterly dividend from 23.5 cents a share to 26 cents, or $1.04 on an annual basis. That works out to a 2.9% yield, above the S&P 500's 1.88%.
Annual per-share earnings fell 2% in 2012 and rose 3% last year. Analysts expect a 1% dip this year and a 10% increase in 2015.
The stock has been working on a flat base since late July and is just shy of a 36.71 buy point. It has been holding above its 50-day moving average since Feb. 7, when shares surged 5% in heavy volume after Republic's fourth-quarter profit and sales topped views.
It sank to the 50-day line April 25 on a Q1 earnings miss, but closed in the upper half of the session range.
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