Waste Management’s leading position in an essential industry during this coronavirus climate shows what a resilient and worthwhile investment it is.
Waste management rotary screening, By now, we’re all aware of the economic uncertainty that the global coronavirus pandemic has presented us with.
Hospitality has been hit hard, the housing market is shifting and shaping, and numerous redundancies across a vast range of different industries have been made, or are potentially imminent as the government’s Job Retention Scheme (or ‘furlough scheme’) draws to a close next month.
And no, the waste management and utilities sector may not be one of the most fashionable or trendy sectors for investors, but it’s definitely good at weathering the effects of financial crises. The waste management industry was pretty unfazed and unaffected when the dot com bubble burst in the early noughties, and then stood strong again in the 2008-2009 recession.
But one company that looks set to soar in its stock value during these times is Waste Management. It’s the largest waste collection and transportation company in the U.S., but its value can be used as an example of how waste management companies across the world will thrive even in the current climate—and even in the face of a recession.
So why is waste management set to be such a success? In its 2020 investor presentation, Waste Management claimed that its “resilient business model and strong balance sheet positioned it well in a challenging environment.” And the stock’s performance over the past 20 years only serves as evidence to back up that claim.
Because Waste Management has generally outperformed the market years when the S&P 500 has produced a below-average total return of less than 5%.
Most notable is its performance in the depths of the last great recession in 2008, which demonstrates its ability to thrive at a time when the economy is weak and struggling. Overall, the stock has risen nearly 10-fold over the past 20 years, more than four times the total return of the S&P 500.
And while these figures prove Waste Management’s ability to outperform the market in times of economic hardship, such as the last recession, its strength is still at play here in 2020, proving its resilience as a business model.
And Waste Management’s leading position in an essential industry during this coronavirus climate shows what a resilient and worthwhile investment it is. It’s an industry that can really thrive regardless of the broader economic situation, and management has increased its dividend annually more than 15 consecutive years now.
This gives shareholders a reliable source of income no matter how stock prices move in the short term.
Digging into the details, the collection services alone contributed more than half of its 2019 revenue. The collection revenue comes from a wide variety of sources, and this helps to ensure that if there are any other declines in different sectors of the economy they don’t crash this revenue stream. Other sources of income include:
- Transfer (10%)
- Landfill (21%)
- Recycling (5%)
This is undoubtedly a time of economic uncertainty as the effects of the global coronavirus pandemic continue to unfold, but the value and certainty of the waste management will stand strong even through the most challenging climate.
If you’re looking for waste management rotary screening starts, get in touch with us today. Waste Management’s leading position in an essential industry during this coronavirus climate shows what a resilient and worthwhile investment it is.