Your Garbage Can Pay You Dividends

First Posted On Our Sister Site @ HighYieldingDividends

Who said their wasn’t money in trash. Well these three companies pass their profits to share holders. Listed below are three companies that are in the waste management industry. Two large caps and one small cap. All three pay a nice dividend. One well known tycoon has a significant stake in Republic Services.

Waste Management, Inc. - was founded in 1894 and is based in Houston, Texas. Waste Management (WM) is the leading provider of comprehensive waste management and environmental services in North America. As of December 31, 2008, the company served nearly 20 million municipal, commercial, industrial and residential customers through a network of 367 collection operations, 355 transfer stations, 273 active landfill disposal sites, 16 waste-to-energy plants, 104 recycling plants, and 111 beneficial-use landfill gas projects.

Republic Services, Inc. - was founded in 1996 and is headquartered in Phoenix, Arizona. Republic Services (RSG) is a leading provider of solid waste collection, transfer, recycling and disposal services. We operate 400 collection companies in 40 states and Puerto Rico and provide top quality services to commercial, industrial, municipal and residential customers. Republic serves millions of residential customers under contracts with more than 3,000 municipalities for waste collection and residential services.

American Ecology Corporation - was founded in 1952 and is headquartered in Boise, Idaho. American Ecology (ECOL) is one of the nation’s oldest providers of radioactive and hazardous waste services. The company accepts hazardous and low-level radioactive waste from commercial and government entities, such as refineries and chemical production facilities, manufacturers, electric utilities, steel mills, and medical and academic institutions. American owns one commercial nuclear waste disposal site and three hazardous waste sites in the United States.

Related Articles:

3 Stocks With Good Dividends and Sales

Garbage in, profits out (A hazardous - waste disposal firm cleans up)

5 signs of a Strong Dividend Stock

Project turns landfill gas into energy in Bay Co.

Kansas landfill to produce, sell electricity

*William (Bill) H. Gates is chairman of Microsoft Corporation, the worldwide leader in software, services and solutions that help people and businesses realize their full potential. Mr. Gates owns 15% of the common shares through his investment vehicle Cascade Investment LLC and The Gates Foundation.

*Mr. Heil is a land developer and private investor, and has owned and operated one of the largest solid waste landfills in the mid western United States. Mr. Heil has more than 40 years experience in the construction and waste service industries and has, since 2002, served as President of E.F. Heil, LLC, operator of a landfill in Plainfield, Illinois. Mr. Heil is a director of American Ecology and the largest individual share holder in the company owning close to 6%of the common stock.

Gates Finds Value For His Foundation And His Personal Portfolio

The former Richest man in the world Bill Gates is now spending much of his time helping his wife Melinda Gates run the worlds largest foundation "The Bill & Melinda Gates Foundation". Along with running the foundation Bill also has his own Investment company known as Cascade Investments, which is a diversified investment company that has holdings in many different fields. Its interesting to note that Gates Holdings in the "Foundation" and "Cascade" are not what you would think of the software king. Most of his holdings are broad based including pharmaceutical, energy, transportation, consumer beverage, building materials and insurance companies. In his personal account which is Cascade Investments he holds an eclectic group, but much more concentrated than the Foundations portfolio. The three largest holdings between the two portfolios are Berkshire Hathaway(BRKA,BRKB), Canadian National Railway(CNI), and Republic Services(RSG). He also has a sizable stakes in Fomento Economico(FMX) which is the Latin American Coke(KO) and beverage company, and Gruppo Televisa(TV) which is a Latin American media company. He also just recently upped his position in Otter Tail(OTTR) an electric company with a diverse portfolio within itself.

Sears, AutoNation, & Savy Billionaires: Gates & Lampert

While many analyst and investors seem to be beating up on companies such as Sears Holdings(SHLD) and AutoNation(AN) investors Eddie Lampert and Bill Gates continue to buy shares. Why? The economy has not been this bad in at least one or maybe two generations. Sears is a retailer who seems to be out played by competitors WalMart(WMT), Target(TGT) and Best Buy(BBY). Then their is AutoNation that is caught up in the Big Three Auto Debacle of Ford(FD), General Motors(GM) and Chrysler. Why are these Billionaires pouring money into these companies? Do they see something that the majority does not see?

"Just recently UBS initiated coverage of the stock with a ‘’sell” rating Thursday, Sears needs to come up with a solution for its operating problems. Many of them involve the basics of retailing: growing comps, executing on merchandising, improving marketing. Without a strategic operating initiative, Sears won’t be able to distinguish itself from the competition in the crowded and stagnant retailing sector, and thus won’t be in a position to reverse a steep sales decline. Also short sellers have also taken an extremely bearish stance on the retailer, as more than 19 million SHLD shares have been sold short. This accumulation of bearish bets accounts for 17.6% of the company's total float, and is 8.5 times the stock's average daily trading volume. Should the equity continue its downtrend, these bears could add to their winning short positions, pushing SHLD even lower."

So what is it that is going on with these two companies? Basically Wall Street is saying these companies suck. In the case of Sears their saying that Sears has a flawed business model and that it is NO SPECIAL retailer. In the case of AutoNation, Wall Street is saying with all the negative press on the auto manufacturers we don't want this one either. Does any of this hold true? Maybe, at least in the short term it does. But for the shrewd business men that I think Gates and Lampert are the answer is a NO!

Is their something more going on here? Well in my humble opinion I think their is. In the case of Sears, yes it is a retailer that does not shine as bright as WalMart or Target, however as I have stated in earlier posts that it sits on alot of untapped Real Estate as well as BRANDED names- Kenmore, Craftsman, Diehard and LandsEnd. Most investors already recognize this and it is talked up in the media over and over. However, I think their is a bigger picture going on with these companies than meets the eye. WallStreet has ALWAYS been short term oriented, their job is to play salesman and to constantly make that commission dollar. While Lampert and Gates are making a bigger play which may take several years to pan out. Can the passive investor make money here? I think he/she can if they have patience and due their own research.

This is an interesting case to study because I think it is more than just a rich guy buying a stock and making 20 or 30%.

related links:

http://stockmanmarc.blogspot.com/2008/10/sears-not-just-your-average-retailer.html

http://stockmanmarc.blogspot.com/2008/11/sears-holdings-esl-investments-mr-eddie.html

http://finance.yahoo.com/news/Gates-Lampert-keep-buying-apf-13871819.html

The author suggest further research before investing.

Author is long SHLD

Bill Gates The Value Investor

It looks like Bill Gates  co-founder of Microsoft is also a value player. Gates controls a holding company named Cascade Investments which has been around for 14 years.  Currently Cascade Investments holds a diverse basket of 18 stocks. These businesses range from a railroad to a soft drink bottling company. It certainly looks like Cascade Investments is modeled in some ways like Warren Buffetts Berkshire Hathaway(BRKA,BRKB) excluding the insurance companies. In a recent 13F filing Gates added to his position in Republic Services(RSG) upping his stake to nearly 20% of the company. Republic Services is one of the United States leading waste providers. The largest holding in the portfolio is Canadian National Railway(CNI) which Gates owns about 7% of the common shares. He also upped his stake in Fomento Economico Mexicano,SAB de SV(FMX) which produces, markets, and distributes Coca-Cola trademark beverages as well as SOL Beer. He now holds 5.9% of the common shares of Fomento. His newest holdings which are rather small purchases include AutoNation(AN), Patriot Coal(PCX) and Strategic Hotels &Resorts(BEE).  Interesting to note is that Buffett and Gates own some significant stakes in the rails. It also looks like Gates took a page out of Peter Lynch's One Up On Wall Street and invested in a boring and disgusting business that being Republic Services. Whats next for the King of Software?

Relevent Articles

What Bill Gates Is Holding

Gates Finds Value For His Foundation And His Personal Portfolio

STOCKMANMARC