The Motley Fool

How to Get Rich From Waste

Waste Connections (TSX:WCN)(NYSE:WCN) is an interesting investment option to consider adding to your portfolio, and the company checks off many of the boxes that investors often look out for when evaluating several companies as viable long-term investments.

Let’s take a moment to talk about what Waste Connections offers and just how intriguing an investment that it could be to your portfolio.

Meet Waste Connections

For those that are unaware, Waste Connections provides waste collection, transfer, disposal, and recycling services to over six million residential, commercial and industrial customers across a growing network of markets scattered across five province and 39 states.

As an investment option, there are actually three compelling reasons why investors should consider investing in Waste Connections.

First and foremost, there’s the business itself. Disposing of garbage is a messy business, but it is one that is a necessity in our world and just as important as (if not arguably more important) providing basic power and water utility services. To be blunt, there are many things we can do without on a daily basis, but homes and businesses will still generate garbage, and a company like Waste Connections will always be needed to collect and dispose of it.

Adding to that is the fact that Waste Connections has completed a number of well-executed acquisitions over the years, which has helped establish Waste Connections as one of the three largest companies in North America for waste collection and disposal.

Second, let’s talk results. The necessary, growing, and recurring nature of the waste business noted above provides a window of opportunity for a well-run business to generate substantial earnings, and Waste Connections fits that description perfectly. In the most recent quarter, Waste Connection reported $1.25 billion in revenue, which was a noted improvement over the $1.14 billion reported in the same period last year. In a similar vein, adjusted net income came in at $163.9 million, or $0.48 per share, in the most recent quarter, while adjusted free cash flow came in at $246 million for the quarter.

Finally, let’s take a look at Waste Connections dividend. While the paltry 0.72% yield is hardly a compelling reason on its own to consider the stock, the dividend has seen impressive upticks in the past — most recently a 14% hike last year. In other words, the current yield is more likely a victim of the impressive growth we’ve witnessed from the stock rather than any perceived weakness. There’s little reason to doubt that Waste Connections will not provide additional dividend hikes and drive up the yield.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.