Veolia Environment fka VE

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Veolia Environment (NYSE:VE)

Yesterday morning, I sent you a buy alert for Veolia Environment. Let's follow up on that now. . .

Veolia Environment provides solid waste, technical solutions, industrial and waste-to-energy services. It is the largest environmental services company in the world, operating in 68 countries and employing more than 100,000 people across the globe.

The company maintains four separate divisions:

Veolia Water – Designing, building, upgrading, operating and maintaining water and wastewater facilities, incorporating water recycling and reuse to find new ways to reduce water consumption.

Veolia Environmental Services – Providing solid waste collection, recycling and disposal services, hazardous waste disposal and recycling services, and industrial cleaning, mechanical maintenance and sewer services. This division also builds waste-to-energy facilities.

Veolia Energy – Managing energy utilities and providing complete facilities management services.

Veolia Transportation – Providing all forms of public transportation including bus, rail, paratransit, taxi and shuttle services.

Now here's the story on Veolia. . .

Last month, the company posted a very disappointing first half loss. The stock took a major hit, and kept falling, finally bottoming out at around $14.00. In response to the news that crushed the stock, the company announced a restructuring whereby it will break with an earlier expansion strategy and shrink operations – exiting about half of the countries where it currently operates. It will leave its transport operations in Morocco, its environmental services in Egypt and its marine services in the U.S., just to name a few.

You can read some of the details here, in the company's half year results.

Overall, I believe Veolia will become a leaner, more profitable company over the next couple of years. Restructuring is never easy, and I'm certain there will be hiccups along the way. But this isn't a fly-by-night company. This is a major player that should see its early 2011 share price restored in the next year and a half. Meanwhile, it's paying a hefty 10% dividend right now.

Veolia isn't a quick money play, but for the long-term investor looking to limit risk in this crazy market, this could be a nice year or two hold for a gain of about 47%. And that's figuring very conservatively. Plus a solid dividend to boot. It's a buy below $15.00.