Dividend Growth Stock Overview: Waste Management, Inc.

Waste Management collects and processes trash and recyclable materials
for more than 21 million customers in North America.
Photo: Flickr.com/Arvell Dorsey Jr.

About Waste Management

Waste Management provides collection, landfill, transfer and recycling services to more than 21 million individual and business customers across the United States and Canada for their garbage and recyclable materials. The company is headquartered in Houston, Texas and employs over 40,000 people.

Waste Management was incorporated in 1987 as USA Waste Services, Inc. In 1998, the company merged with Illinois-based Waste Management; the parent company took the name Waste Management and the other company became a subsidiary to the parent.

The company’s residential and business waste collection operations begin with either a contract or franchise granted by a municipality or other regional authority (including homeowners’ association) or a 3-year service agreement, in the case of commercial and industrial collection. The waste is moved to one of Waste Management’s 297 transfer stations where it is consolidated and compacted for further movement by truck or rail to one of the company’s 249 landfills. In the case of recyclable waste, it is either collected separately or separated at the transfer stations and moved to one of 104 material recovery facilities, where it is repackaged for sales to interested customers. Waste Management also manages the marketing of recyclable materials for third-party customers. The company generates additional revenue by selling methane gas generated by the natural decomposition of garbage to electrical generation customers. Waste Management operates 136 landfill gas projects that generate commercial quantities of methane gas.

The company is a member of the S&P 500 index and trades under the ticker symbol WM.

Waste Management’s Dividend and Stock Split History

Waste Management Dividends

Waste Management has grown dividends at a compounded rate of less than 4% over the last 5 years.

Waste Management has paid dividends since at least 1998 and grown them since 2004. The company announces dividend increases at the end of February with the stock going ex-dividend at the beginning of March. In February 2016, the company announced a 6.5% increase to an annual rate of $1.64 a share.

Waste Management has a record of small to moderate annual dividend increases. The company has compounded its dividend over the last 5 and 10 years at rates of 3.82% and 6.42%, respectively.

Waste Management has not split its stock in its history.

Over the 5 years ending on December 31, 2015, Waste Management stock appreciated at an annualized rate of 11.51%, from $30.52 to $52.63. This slightly outperformed the 10.20% compounded return of the S&P 500 index over the same period.

Waste Management’s Direct Purchase and Dividend Reinvestment Plans

Waste Management has both direct purchase and dividend reinvestment plans. You do not need to be a current shareholder to participate in the plans. The minimum initial investment in the plans must be $500, either in a single purchase or through automatic debits of at least $50 each over at least 10 months. The plans allow for full or partial dividend reinvestment.

The plans are not favorable for investors, as the fees for purchases and sales are significant. There is a $10 enrollment fee for the plans. In addition, when purchasing shares you’ll pay a fee of $5 for purchases by check or one-time automatic debit. The fee is $2.50 for recurring automatic debits. There is a 5% fee on reinvested dividends, up to a maximum of $5. Finally, there is also a commission of 5 cents per share on all purchases. When you sell your shares in the plan, you’ll pay a fee of $15 for batch sell orders or $25 for other types of sell orders along with a 12-cent per share commission. Finally, if you place your sell order through a customer service representative on the phone, you’ll pay another $15 fee. All fees will be deducted from the sales proceeds.

Helpful Links

Waste Management’s Investor Relations Website

Current quote and financial summary for Waste Management, Inc. (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Waste Management, Inc.

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