Garbage is the very polar opposite of “sexy.” Hauling refuse and recyclables is about as exciting as watching paint dry. Trash is definitely not as interesting as the latest mobile device, app or artificial intelligence big data application. But there is plenty of gold in garbage. As they say, there are riches in niches. And this fact has continued to benefit our Best Dividend Stock List pick in the environmental services sector.
Our pick is one of the largest trash haulers in North America. This allows the firm to benefit from its huge asset base, size and scale to have some of the most enviable margins in the entire sector. And it’s put those margins to good use – increasing shareholder rewards through buybacks and increased dividends. In fact, our pick has raised its dividend consecutively for the last 15+ years.
The proof of all this stability can be found in the firm’s latest results. Even during the pandemic, volumes for commercial clients remained steady and cost controls helped navigate the quarter with ease. So much so that the firm predicts its 2020 numbers will be better than originally estimated and that its dividends will remain intact.
Perhaps the best news continues to be our pick’s use of the downturn to add to its size and scope. A long proponent of growth through M&A activity, our pick continues to digest smaller rivals and is going through with one of its largest acquisitions ever. All in all, this will only serve to boost margins and its size even further.
In the end, our picks size and boring niche continues to pay plenty of benefits for shareholders.
To summarize, here are five reasons why you should own this stock:
- The largest environmental services firm in north America with nearly $15 billion in annual revenues.
- Latest quarter showed steadfast revenues with strong commercial and residential demand.
- Increased its dividend for 15+ years straight, with a pledge to maintain dividend at 30-40% of free cash flow.
- Acquisitions and M&A continue to fuel bolt-on growth.
- Healthy payout ratio of 56% and growing yield of 1.98%.
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