Waste Management, Inc. (WM): Why Is This a Stable Alternative Energy Play?

Another competitor, Stericycle Inc (NASDAQ:SRCL), is a medical waste and compliance provider, including biohazard and pharmaceutical waste management. Stericycle has a market cap of $9.2 billion, and a higher P/E ratio of 33.4, which is higher than those of Waste Management and Republic. This higher P/E is likely due to the growing niche market that Stericycle is in.

The company had net income of $2.8 billion for 2012. It currently does not pay any dividends. Stericycle Inc (NASDAQ:SRCL)’s stock hit a 52-week high of $113.11 in mid-May, but is now trading around $106.  Overall, the company seems to have greater prospects in the waste-disposal industry but you have to pay a larger price on an earnings-yield basis.

Foolish bottom line

Waste Management, Inc. (NYSE:WM), as a significant provider of renewable energy, is an environmentally friendly investment opportunity. Furthermore, the company has an attractive dividend yield, although there is no guarantee that dividends will continue in the future. Revenue appears stable but may not be growing as much as some investors would like.

The company has many advantages over the solar sector. Compared to a monthly volatility of 4.5% for the Guggenheim Solar ETF (TAN), Waste Management is much more stable and is not subject to the uncertainty of Chinese competition. Thus, environmentally conscious investors, as well as dividend investors, should seriously consider taking a good look at Waste Management.

The article Why Is This a Stable Alternative Energy Play? originally appeared on Fool.com and is written by Mike Thiessen.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool recommends Republic Services, Stericycle, and Waste Management. The Motley Fool owns shares of Waste Management. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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