The U.S. produces around 268 million tons of trash annually. That’s a staggering sum. Most of us don’t pay too much attention to what happens after we throw something in the garbage. But providing environmental services and taking care of that trash is a big business that benefits those players with scale. This includes our latest Best Dividend Capture Pick. Our pick has successfully used its scale to generate billions in profits and reward its shareholders with over two decades’ worth of dividend increases!
Our pick is a waste disposal company, providing collection services for businesses, consumers, and other enterprises. The key for our pick remains its size and integrated model. Not only does our pick collect garbage and recyclables, but it also owns landfills, transfer stations, and other key pieces of environmental infrastructure. This scale has allowed it to reduce costs, increase margins, and charge other smaller operators fees to use its facilities. Meanwhile, strict regulations keep competition low for the industry. The end result is that our pick is able to generate plenty of cash flows from its operations.
And while garbage may not seem like a growth industry, our pick has been able to find plenty of opportunities to grow. This includes a hefty dose of M&A and buyouts of smaller regional players to instantly increase its size/scale. At the same time, the firm has expanded into more hazardous waste and recycling collection businesses. These have continued to add higher-margined cash flow to its bottom line. Finally, technology is quickly becoming a big driver, with new data capabilities and automation providing customer relationship management and wringing out inefficiencies.
The combination of steady demand, scale, and growth elements has made our pick a free cash flow machine. And in that, it’s rewarded shareholders and has become a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, April 1, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 5.1 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest environmental services stock could be a lucrative option.
