Friday, April 13, 2012

One man's trash is another man's treasure

Waste Management Logo
Waste Management Logo (Photo credit: Wikipedia)

Dividend Machine for week of April 8, 2012 Waste Management WM
            I love the old phrase “one man’s trash is another man’s treasure.”  This week that old phrase is so true.  Waste Management is my selection for the dividend machine for this week.

            Trash will never go away.  Trash recycling and management is an essential piece of all our lives even if you compost.

            Here are the data that support WM as a dividend machine.  Today WM is trading at about $35.33 per share.  It has paid dividends since 1986 and has increased the payout every year for 8 years.  D/E which is the ratio between debt owed and assets is 1.61.  This is a touch high but within the normal range for this industry.   And, WM has been able to manage that ratio quite well over time.

            Next we look at the last four quarters of earnings and dividends.  You’ll notice that this year, 2012, I use more scrutiny on earnings than in 2011.  In 2011 I used only the most recent quarterly earnings and in 2012 I use a full four quarters of earnings to determine if EPS (earnings per share) are greater than dividends per share.  EPS were $2.04 per share and dividends were $1.36. 

            The most recent dividend was $.355 per share.  Based on that payout the dividend yield is 4%.


Price when profiled $35.33
Last 4 Qtrs Earnings $2.04
Dividend per year $1.42
Dividend yield 4.02%
No. of Years increased 8
Debt/Equity ratio 1.61%

            Make trash into your treasure and consider WM as an investment for the income producing portion of your portfolio.

Very Truly Yours,

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