Waste Management and the Clean Side of a Dirty Business

Waste Management's (NYSE: WMI) tagline 'Think Green' not only expresses a commitment to its four R's (Reduce, Reuse, Recycle and Recover), it also describes another type of green associated with its business: money.

Garbage is, after all, big business, especially for this trash hauler and landfill operator. Waste Management is a true industry heavyweight, boasting over $13 billion in annual revenues and sitting atop the heap as the world's biggest environmental services company and North America's largest residential and commercial trash collector and recycler. While the business of garbage is far from glamorous, Waste Management  dominates an industry that happens to be profitable and relatively recession-resistant.

And aside from its waste-to-energy subsidiary Wheelabrator Technologies Inc.'s usual business of generating energy through incinerating trash in chambers with water-filled walls to create steam power, the company is busy with some other promising renewable projects.

It has signed on as distributor for Needham, Mass.-based BigBelly Solar's curbside trash compactors, devices made from recycled materials that function as street-side trash cans but are fitted with solar panels that power a motor that crushes the garbage, reducing the frequency of collection; it is negotiating to build waste-to-energy plants in China that would double its power generation revenue; and it has formed S4 Energy Solutions, a 50-50 joint venture with InEnTec LLC, to convert trash, commercial waste and industrial byproducts into a form of gas for electrical, heating or transportation fuel use.

In the joint venture, the process will involve InEnTec’s Plasma Enhanced Melter technology, which uses electricity-conducting gas called plasma to heat waste to extremely high temperatures—between 10,000 and 20,000 degrees Fahrenheit—that transform the garbage into syngas (synthetic gas). The technology is capable of processing a number of different materials, including used tires and radioactive waste. The project, which is set to begin operations in a plant at the Dow Corning facility in Midland, Mich., later this year, will help Waste Management move closer to its goal of doubling renewable energy production by 2020 and keep the trash giant on the cutting edge of new waste technology investment.

For growth-oriented investors there are a lot of reasons to love Waste Management, starting with its size and financial strength (the cash-rich company had $480 million in the bank at the end of 2008). And then, there's the seasoned management team, the sustainable dividends, and the 24% market share that keeps competitors busy playing catch-up.

Now, that's anything but rubbish.