December 12, 2012
In the video below, Fool analysts Blake Bos and Austin Smith discuss the biggest risks facing Waste Management (NYSE: WM ) today. Investors may buy Waste Management for the stock's stability, but there are risks facing WM that could undermine that appeal.
The first is pressure on small governments, which rely on the federal government to be able to contract with companies like Waste Management for services. A cut to small government funding could hamper WM's ability to raise prices. Second, smaller competitors, especially in smaller markets, could step in an undercut WM's prices, forcing it either to lower prices or leave markets. Lastly, although investors are excited about Waste Management's entrance into the waste-to-energy area, the move also exposes the company to commodity price fluctuations. That could undermine some of the regularity investors have come to expect from WM in terms of margins and earnings.
Despite the three potential risks mentioned here, Waste Management has been a longtime favorite for dividend seekers everywhere. If you're wondering whether this dividend dynamo is a buy today, you should read our premium analyst report on the company today. Just click here now for access.