What happened

Shares in trash collection landfill owner Waste Management (WM -0.78%) increased a whopping 16.3% in March, according to data provided by S&P Global Market Intelligence.  The move was not accompanied by any significant news and probably comes down to a sentiment shift in the marketplace.

As you might imagine, Waste Management's end markets are about as secure as you can get. After all, trash collection is a basic necessity, and the company's ownership of landfills -- highly regulated assets -- means it has an economic moat. That said, waste disposal volumes did decline as a result of the pandemic, and the company temporarily suspended "price increases and certain fees for customers impacted by the COVID-19 pandemic" in 2020, according to management.

Waste disposal bins.

Image source: Getty Images.

Waste Management is not completely immune from the economy. However, it is much less exposed than most, and many investors buy the stock for its safe and predictable dividend stream. They do not buy it as a cyclical play on growth in the economy.

The following chart helps illustrate what happened in March. Waste Management's stock underperformed the S&P 500 and also the technology-heavy Nasdaq-100 index over the last year. However, the Nasdaq index moderated due to a sell-off in technology stocks. Waste Management started to outperform as investors switched into more defensive stocks.

WM Chart

Data by YCharts

So what

It's very difficult to time the market and predict which sector or style of investment will be in fashion from one period to the next. It's far easier to ascertain the value of a stock, and in particular with a company like Waste Management.

The following chart shows the company's valuation (based across a range of valuation methods) has jumped to multi-year highs.

WM PE Ratio (Forward 1y) Chart

Data by YCharts

Now what

Waste Management is a quality company and a relatively safe way to invest for a secure income stream from dividends. However, it's hard not to think that it's been overbought recently, and now might not be the best time to initiate a position in the stock.