Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Waste Management Inc (WM), Clean Harbors Inc (CLH): Make Money in Growing Environmental Stocks — the Easy Way

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some environmental services stocks to your portfolio, the Market Vectors Environmental Service ETF (NYSEARCA:EVX) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF’s expense ratio — its annual fee — is 0.55%. The fund is very small, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has outperformed the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why environmental services?
Interest in environmental responsibility and alternative energies has been growing, and is likely to keep doing so. Many of the companies in environmental services are still small, with lots of room to grow. And since we can’t know which ones will grow most, it can make sense to invest in a bunch of them, as this ETF permits.

More than a handful of pro-environment companies had strong performances over the past year. Waste Management, Inc. (NYSE:WM) surged 14%. Unbeknownst to many, the leader in garbage collection is also a recycling giant and a leader in converting waste and landfill gases to energy. It offers a hefty 3.8% dividend yield as well, and it has been streamlining its business and cutting costs.

Rentech, Inc. (NYSEAMEX:RTK) gained 6%. It has offered investors early entry into the biofuel industry and established nitrogen fertilizer operations. Its bottom line has been in the red recently and it’s a penny stock, but its free cash flow has turned positive. The company has been shifting its focus away from alternative energy and toward opportunities that offer more immediate payoffs.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Veolia Environnement SA (NYSE:VE) shed 8%, and has been doing its own shifting of focus, shedding waste operations and boosting its water management work. It’s cutting costs and working on paying down a lot of debt, and its earnings recently dipped into the red.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.