Will Waste Management Clean up in 2013?

As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Waste Management (WM -0.88%). The trash and recycling specialist managed to post decent gains in 2012, but stronger competition is starting to take its toll on the company's dynasty. Below, you'll learn more about Waste Management's prospects for 2013.

Stats on Waste Management

Source: Yahoo Finance.

Will Waste Management be trash or treasure in 2013?
Waste Management hasn't grown quickly for some time, and analysts don't think 2013 will be much different. With earnings and revenue gains muted at best, the average target price analysts have put on the stock is just 2% higher than its current share price.

The thing that keeps investors coming back to Waste Management is its dividend. With healthy cash flow, the company has been able to keep boosting its payouts to shareholders while still retaining enough capital to invest in new projects.

Moreover, one big advantage that Waste Management has over smaller players Republic Services (RSG -0.13%) and Waste Connections (WCN -0.60%) is its extensive network of landfills. With more available capacity, Waste Management is able to dictate prices, and its recent acquisition of Oakleaf allows it to provide trash outsourcing services to other trash companies, essentially collecting trash from trash haulers and reaping the benefits of landfill fees as well as potential energy products.

Still, perhaps Waste Management's biggest potential comes from landfill energy. With Veolia Environnement (VEOEY -0.10%) having largely abandoned the U.S. market, Waste Management remains with big potential to profit from biogas produced from landfills. Thanks to Capstone Turbine (CPST) and its multi-fuel generators, Waste Management may have a growing revenue source from gas.

Waste Management doesn't blow investors away with growth, but its solid performance is a useful trait in uncertain times. If the company can make use of its leadership position, beating sales and earnings estimates could be the first step toward a blockbuster year for the stock.

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