Haven't we seen this all before? Not too long ago, waste-handling companies were a hot area of the market. The story then was all about consolidation, economies of scale, and the advantages of predictable business demand. That seems to be the story again today, as Waste Connections (NYSE:WCN) contends to be king of a rather foul-smelling mountain.

There's definitely money to be made in trash. Waste Connections' fourth-quarter revenue rose 16%, with internal growth (would that be "same-dump sales"?) of about 4.9% split between both price and volume. Profitability takes a little more work to suss out, but it seems that adjusted operating income was up 9%, as cost growth tied to depreciation and sales, general, and administrative expenses outstripped revenue growth.

Looking beyond this quarter's numbers, Waste Connections would seem to have the best margins amongst publicly traded waste haulers. Nevertheless, that hasn't yet translated into an especially robust return on invested capital. I'm sure that management can boost this figure from the mid single-digits as the company integrates more acquisitions over time, but it still seems a bit low today.

Speaking of acquisitions, the company seems to have robust plans for opportunistic or strategic buys. Given the advantages of scale in this industry, and Waste Connections' small size relative to Allied Waste (NYSE:AW), Republic Services (NYSE:RSG), and Waste Management (NYSE:WMI), that's probably not a bad idea, though it might delay improvements in margins and return on capital.

This stock doesn't look all that cheap on a P/E basis -- but then, I don't really pay attention to P/Es. Cash flow is the name of the game for me, and you could argue that there's some meaningful double-digit upside here without making any especially heroic assumptions. Nonetheless, I'm a little wary of companies with high debt and a jones for acquisitions. You know what they say, Fools: One investor's trash is another's treasure.

Further recycled Foolishness:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).