Waste Management (WM)
It’s not the most glamorous of industries, but waste management is an essential one.
No matter what happens with the economy, municipalities have little choice but to pay companies to get rid of our mountains of garbage, even if those costs increase.
As one of the biggest players in the space, Waste Management remains in an entrenched position.
The shares have more than doubled over the past five years and are up about 42% year to date. Management is projecting 15% revenue growth this year.
Currently offering a yield of 1.4%, Waste Management’s dividend has increased 18 years in a row.
The company has paid out almost $1 billion in dividends over the last year, and its roughly $2.5 billion in free cash flow for 2021 means investors shouldn’t have to worry about receiving their checks.
As a company whose fortunes typically follow that of the larger economy — that’ll happen when your equipment is a fixture on building sites the world over — Caterpillar is in an intriguing post-pandemic position.
The company’s revenues are feeling the effects of a paralyzed global supply chain, but still-historically low interest rates and President Joe Biden’s recently passed $1.2 trillion infrastructure bill mean there could be an awful lot of building going on in the U.S. in the near future.
Caterpillar’s mining and energy businesses also provide exposure to commodities, which tend to do well during times of high inflation.
The company’s stock has ridden higher raw material and petroleum prices to an almost 15% increase this year.
After announcing an 8% increase in June, Caterpillar’s quarterly dividend is currently at $1.11 per share and offers a yield of 2.2%. The company has increased its annual dividend 27 years straight.
With grocery stores deemed essential businesses, Walmart was able to keep its more than 1,700 stores in the U.S. open throughout the pandemic.
Not only has the company increased both profits and market share since COVID coughed its way across the planet, but its reputation as a low-cost haven makes Walmart many consumers’ go-to retailer when prices are rising.
Walmart has steadily increased its dividends over the past 45 years. Its annual payout is currently $2.20 per share, translating into a dividend yield of 1.6%.
After trending slightly downward over the past month, Walmart currently trades at roughly $136 per share. If that's still too steep, you can get a smaller piece of the company using a popular app that lets you to buy fractions of shares with as much money as you are willing to spend.
Look beyond the stock market
At the end of the day, stocks are inherently volatile — even those that provide dividends. And not everyone feels comfortable holding assets that swing wildly every week.
If you want to invest in something that has little correlation with the ups and downs of the stock market, take a look at some unique alternative assets.
Traditionally, investing in fine art or commercial real estate or even marine finance have only been options for the ultra rich, like Gates.
But with the help of new platforms, these kinds of opportunities are now available to retail investors, too.
Fine art as an investment
Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.
That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.
Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.
And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.
On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.
Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.
Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.