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Company Profile: Waste Management is a Houston-based provider of integrated waste services in North America. Through its subsidiaries, it provides collection, transfer, recycling, disposal and waste-to-energy services.
Waste Management raised its quarterly dividend by 7.9% to 34 cents per share, marking its seventh consecutive annual dividend increase.
The company said its board will declare the dividend in February, during the first quarter of 2011, and will set the record and payment dates at that time. The first payment is expected to be made in March of next year, bringing Waste Management's yield to around 3.7%.
Waste Management is the league leader in the waste business, with nearly 20 million customers under its belt. Waste has long been a favored industry because of its recession resistance -- an especially attractive attribute when times are tough.
short-squeeze opportunities exist around Waste Management
as a number of investors bet blue chips like it will fall.
As of early December Waste Management sported a short-interest ratio of 11.2.
Waste collection is a relatively low-margin industry, and right now operators are approaching market saturation here in the U.S. With relatively high fixed costs (the result of union agreements and the high capital requirements of operating truck fleets and waste disposal sites), Waste Management needs to keep its operations churning to continue to deliver dividend-generating profits to investors.
Even so, there's little else in the way of bearish catalysts to justify the high short ratio this stock is currently seeing. With decent cash generation capabilities, expect trimmer operations -- and more buyers -- ahead.