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Waste Management (
WM) is a garbage stock right now. Why else would WM's short interest ratio hover around 12.6? Of course, Waste Management
is in fact a garbage stock of sorts -- it is the largest waste management service provider in the country. The firm boasts more than 270 landfills and a massive fleet of trash collection vehicles that spans the U.S.
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When I think garbage firms, the first thing that comes to mind is dividends: WM and its peers historically have generous, recession-resistant dividend payouts. Currently, Waste Management's yield adds up to 3.36% annually. Don't forget, dividends are like kryptonite to short sellers.
WM's willingness to embrace innovation has big potential in the years ahead. Right now, the firm's portfolio includes 22 waste-to-energy plants that are designed to turn the waste that WM literally gets paid to collect into renewable energy that the firm gets paid for again. At this point, the firm's energy plants make up a very small part of its total business, but waste-to-energy projects and the recent acquisition of small oil service firms should look attractive to investors right now.
Earnings in two months look like the next big catalyst for a short squeeze in WM.