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City waste management concept

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Environmental Services Giant With 15+ Years of Dividend Growth Makes It to Best Dividend Stocks List

Aaron Levitt Mar 26, 2020


By and large, most Americans are blissfully unaware of what happens to the nearly 250 million tons of trash humans generate every year – it’s one of the benefits of living in a modern society. But for those paying attention and operating in the $300 billion environmental services industry, it can mean some serious bucks.

This brings us to our new Best Dividend Stocks List pick in the sector.

As the largest garbage hauler and environmental services firm in the country, our pick features a huge – and irreplaceable – moat. Thanks to high barriers to entry and regulation, it’s very hard to enter the waste services industry. Opening a new landfill is pretty much impossible for smaller mom-and-pop players, while the capital requirements needed to build transfer stations, hauling operations, and recycling centers in order to compete against our pick are staggering. Most haulers simply can’t afford to do it.

This provides our new pick with plenty of pricing power; even more so considering that most homeowners aren’t given the choice of which waste collection company to use. It’s up to your municipality, and our pick is able to use its scale to price-out many of its smaller rivals – meaning that our recent DARS pick sends tons of cash flows back into its (and its investors!) coffers.

Since 2004, our pick has managed to raise its quarterly dividend by over 190%, as well as conduct plenty of share buybacks.

The best part is that its recycling programs, new technology, and various industrial services provide additional avenues for our pick to find new growth opportunities. The combination – plus its recession-resilient revenues – makes it an ideal selection in the current market’s volatility.

To summarize, here are five reasons why you should own this stock:

1. Environmental services giant in North America with nearly $15 billion in annual revenues.
2. Rising industrial demand and investments in technology have helped drive margins further.
3. Has increased its dividend for more than 15-years straight, including a 6%+ jump this year.
4. Acquisitions and M&A continue to fuel growth.
5. Healthy payout ratio of 48% and growing yield of 2.18%.

Removal of a Retail Name

With COVID-19 hitting global economies, many retailers are feeling the pinch – even those who have been getting the omnichannel theme right. Being a niche in the non-necessity products’ segment, the retailer has been hit hard by the challenges posed by COVID-19. Add in the unexpected departure of a key executive and you have a recipe for a low DARS Relative Strength score. With this pushing its overall score too low, we’ve been forced to remove the stock from our coveted list.

Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.

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