I Just Boosted My Dividend Income! See What I Bought

Key Concepts

• Waste Management (WM)
• Landfills
• Recycling
• Renewable Energy
• Healthcare Solutions
• ScareCycle acquisition
• Dividend
• S&P 500 outperformance

Waste Management (WM) Investment Rationale

The speaker recently purchased shares of Waste Management (ticker WM) for their personal portfolio with a primary focus on safety. The core investment thesis revolves around the company's dominant position in the waste management industry, often summarized by the adage, "your trash is my treasure."

Market Dominance and Infrastructure

• Landfill Network: Waste Management operates the largest network of landfills in the United States and Canada, boasting 262 sites. This extensive infrastructure solidifies its position as the "top dog" in the waste disposal sector.
• Reliability of Demand: The nature of the waste management market is characterized by its inherent reliability. The continuous production of trash ensures a consistent demand for the company's services.

Diversification and Growth Segments

Beyond its core landfill operations, Waste Management benefits from several growing segments:

• Recycling Segment: The company is actively involved in and benefits from the expansion of its recycling operations.
• Renewable Energy Division: Waste Management is developing and operating renewable energy projects, likely leveraging landfill gas.
• Healthcare Solutions Business: This segment addresses specialized waste needs, particularly in the healthcare industry. A significant development in this area was the acquisition of the medical waste company ScareCycle last year.

Investment Outlook and Performance

The speaker views Waste Management as a company suitable for indefinite ownership due to its stable business model and the added benefit of a dividend. The longer the stock is held, the more financially advantageous it becomes.

• Recent Stock Performance: Shares have experienced a slight pullback recently.
• Long-Term Outperformance: Despite the recent pullback, Waste Management has significantly outperformed the S&P 500, achieving a 90 percentage point outperformance over the last decade.
• Future Intentions: The speaker plans to hold and continue adding to their WM position for many years.

Conclusion

Waste Management (WM) is presented as a safe, reliable, and long-term investment due to its market leadership in landfills, diversified revenue streams including recycling and healthcare solutions, and a history of strong performance relative to the broader market. The company's dividend further enhances its appeal for long-term holding.