Buying stocks with a high dividend yield can be a great way to increase income and that’s the goal within Athena Invest’s Athena Dividend Income model. The top holding in the model is US Ecology (NASDAQ: ECOL), which had a 4.13 percent dividend on January 19th (Money.CNN.com). In September of 2010, ECOL acquired a hazardous waste facility in Canada. This particular facility is unique in that it uses a proprietary treatment technology called Stablex to stabilize hazardous waste and contaminated soils and creates an environmentally secure material out of them for release in landfills. But the news for the company last year wasn’t all good. In October they were fined almost $500,000 by the EPA for hazardous waste violations. According to a press release issued by the EPA
EPA inspectors found numerous violations at a hazardous waste unit designed to thermally treat contaminated materials, like soils, to remove the hazardous components. On two occasions, US Ecology reports showed that the unit was “smoking,” releasing hazardous components to the air. The treatment unit has been permanently shut down by US Ecology. (“US Ecology to pay nearly $500,000 for hazardous waste violations,” October 5, 2010, EPA.gov)
Despite this, Wunderlich Securities started ECOL as a buy on October 7th and in a report released in December, clarified their position and maintained a Buy rating while mentioning
The company has an irreplaceable set of treatment, recycling, and disposal assets in the highly regulated hazardous waste market. Looking forward, we believe a stable to slow growth economy should help restart organic growth with significant potential from increased government environmental spending and synergies from its 4Q10 acquisitions. In addition, the recent announcement by General Electric (GE-NR) to move forward with the final phase of the Hudson River clean-up should provide ECOL with an incremental $7mm-$9mm of annual revenue over the next five to seven years. (“Hudson River Clean-Up Starts Spring 2011, Wunderlich Raises PT On ECOL,” December 27th, 2010, Bencinga.com)
