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NEW YORK (TheStreet) --  Recycling has become less profitable as a result of lower oil prices, Waste Management  (WM - Get Report) CEO David Steiner said on CNBC's "Squawk Box" on Friday morning. 

"[Low oil prices] are good news for our fleet, but with recycling low energy prices, both oil and electricity is what drives fiber and plastics recycling. So when you have those low oil prices, you can't sell the materials for as much on the back-end, which means it becomes less profitable. Which means you dis-invest in it," he explained. 

About five years ago, recycling was 12% of Waste Management's business and it was investing $300 million to $400 million in it, Steiner said. Now, it's only about 8% of the company's business, with investments of under $20 million a year, Steiner said. 

For recycling to be profitable again, "you either need to draw down the processing cost or you need to drive up the price on the back-end," he claimed. "Hopefully both."

Recycling tends to have a three-to-four-year V-shaped curve, where it goes down quick and pops back up quick, Steiner said. And right now, we're in the fourth year of "basically a recycling recession," he said. 

"And what I like to say is, 'If we're dis-investing in recycling, think what the other folks are doing that don't have other parts of business to fall back on," Steiner said. 

(Waste Management stock is held in the Dividend Stock Advisor portfolio. See all of the portfolio's holdings with a free trial.) 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Waste Management as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that the team rates.

You can view the full analysis from the report here: WM

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