Services Sector Ideas

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Waste Connections - >>> An underrated multibagger stock


Motley Fool

May 1, 20121


https://www.fool.com/investing/2021/05/01/3-top-stocks-you-can-buy-and-hold-for-the-next-dec/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Would you expect a stock in a typically defensive, slow-growth sector like utilities to more than quintuple in one decade? Waste Connections (NYSE:WCN) has silently made millionaires out of patient investors, and there's every chance you could become one too if you can buy and forget this stock.

But before that, you may ask: It's easy to understand that a company that collects and disposes of waste has a steady, recession-proof business, but what's going to drive its growth? You see, Waste Connections has a couple of things going for it.

First, it relies on exclusive service-provider agreements and acquisitions in new markets, particularly the low-penetrated secondary and rural markets, to expand its landfills and customer base. This strategy has proven hugely successful so far. The company made 21 acquisitions each in 2019 and 2020. Second, Waste Connections' subsidiary R360 is a key waste management player in the oil and gas sector, having operations in major shale plays like the Bakken, Permian, and Eagle Ford basins.

Waste Connections expects revenue to grow 6.5% in 2021, but that doesn't account for potential acquisitions. Also, another double-digit dividend increase is in the cards -- the company has increased dividends every year for 10 consecutive years. That should add to the stock's appeal, making Waste Connections a great stock to own for the long haul.

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