While the markets are in complete turmoil and the overall Industrial sector seems to be in a bearish environment, the waste services sub-industry has managed to stay afloat. The waste services industry is very simple: it is comprised of companies that collect, transfer, recycle, and dispose of garbage. It is an industry that has few competitors and very stable demand. Let’s face it; there will always be garbage that needs to be disposed.

So to give you an introduction to the industry, there are three major competitors:

Waste Management (WMI: 34.09, +0.23 (+0.68%)): Waste Management offers trash collection, transfer of waste services, recycling, disposal and waste-to-energy conversion services. In addition they rent and service portable restroom facilities, provide street and parking lot sweeping services, they offer portable self-storage and fluorescent lamp recycling services and other industry related services. These additional services help them separate themselves from the competition in a fairly monotonous industry. Geographically, they are located all throughout North America and service regions all throughout the United States.

Waste Connections (WCN: 37.50, +1.72 (+4.81%)): Waste Connections is a solid waste services company that provides solid waste collection, transfer of waste services, disposal, and recycling services. They are much smaller than Waste Management and are exclusively based in the southern and western regions in the United States.

Republic Services (RSG: 32.73, +3.86 (+13.37%)): Republic Services provides solid waste collection and disposal services for commercial, industrial, municipal, and residential customers in the United States. They are the smallest of the three big waste services companies and they operate throughout the United States, however they are not as concentrated as Waste Management in many of these areas.

The major differences between the three of these companies is their market cap and the geographic region which they serve.

A Historical Perspective

This sub-sector seems like an ingenuous “safe-haven play” in my opinion. To better rationalize this, let’s take a more historical look at this sub-sector’s performance in a recessionary time period. In the March-to-November 2001 recession, the S&P Index returned -8.91% (calculated from 3/1-11/30).