One man’s trash is another man’s treasure. That adage couldn’t be truer than for the firms that operate in the environmental services industry. It turns out there’s gold in the garbage. For our newest Best Dividend Protection Stocks Model Portfolio pick, it’s been turning trash into treasure since the 1960s and has been rewarding investors with strong dividend growth for the last twenty!
You can check out the Best Dividend Protection Stocks Model Portfolio to explore all the stocks.
The secret is in its size, near monopoly and irreplaceable assets.
Our pick happens to be one of the largest environmental services organizations in the nation, allowing it to make the most on volumes for trash hauling and recycling. Better still is that most consumers don’t have a choice who their garbage company is.
Like an electric utility or cable company, you’re pretty much stuck with whoever has the contract for your neighborhood. This leads to steady revenues and cash flow. Finally, our pick’s landfills and recycling centers are one-of-a-kind assets with high barriers to entry. In fact, other environmental services companies pay our pick to store their garbage there.
All of this provides stable cash flow and profits for our firm.
But our pick has grown as well. Trash hauling is a very fragmented industry, with many smaller players. Our pick has been a strong user of M&A to grow and instantly add new routes and customers to its bottom line.
All in all, our pick represents a great choice for conservative portfolios, blending growth and stability.
In order to make room for our new environmental services stock, we’ve removed a defense contractor and reduced our position in a quick service restaurant stock.
