Whenever I saw a big green Waste Management (NYSE: WM) truck roll by, I never thought to myself, "Oh! Neat! A multi-purpose waste vehicle!" It was always something more like "Gross. Garbage truck." Then I started thinking about landfills, and rushed home to recycle as much as I possibly could.

Recently, though, I've found that garbage trucks make me think instead about dividends.

Waste Management is one of the best dividend stocks out there. One of my fellow Fools has recently shown how safe its dividend is, and with excellent interest coverage and a solid free cash flow payout ratio, our Motley Fool CAPS community likes the stock enough to give it its highest rating. But I still ask myself: What's the company doing to stay on top?

As it turns out, managing waste isn't just about landfills. Last year, 16% of Waste Management's revenue came from its recycling and waste-to-power businesses. Waste Management's revenue rose for the first quarter in 2011, and the company mentioned increased recycling volumes as one of the reasons why. (Twice.) All told, recycling brought in revenue of almost $1.2 billion in 2010.

The Environmental Protection Agency's most recent numbers show that of the 243 million tons of trash generated annually, 82 million tons became composted or recycled. It's no coincidence, then, that Waste Management just closed a deal with the Peninsula Compost Company, owner and operator of the largest composting facility in the eastern U.S. Pair this with Waste Management's controlling interest in a leading organic lawn and garden products company, and you may suddenly envision customers leaving piles of compost on the curb next to the trash every week.

Trash to gas
Waste Management turns garbage into energy in two ways. The company converts garbage into energy through combustion, and harnesses naturally occurring gas in landfills. The company inked a deal last week to provide the city of Renton, Wash., with 19 quieter, cleaner trucks. Guess what they run on? Natural gas. Waste-to-energy services accounted for $889 million in revenue in 2010.

Other businesses want to capitalize on the important trend toward recycling. Interested investors should consider keeping an eye on companies like Metalico (AMEX: MEA), an up-and-coming industrial recycler, or corporations like Panasonic (NYSE: PC), which just formed a conglomerate to promote electronics recycling in China.

You can lead a Fool to water
Waste Management is one of the biggest dividend boosters of the past 10 years, with a whopping 62.5% annualized 10-year dividend growth rate. However, a dividend is only as impressive as the company that issues it. Waste Management is a solid company that's smart enough to diversify as much as one can in the garbage industry. With multiple recycling initiatives focused on turning trash into cash, I expect this company to be around for quite some time. In the end, it was the dividend that led me to Waste Management, but it was the garbage that made me dive in.

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Waste Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.