Garbage Could Help Your Portfolio
Cramer’s been on a mission this week to give you profitable, alternative options outside US borders to protect your portfolio from the wavering fate of the US economy. Whether you think this country is going in the right direction or not, Cramer reminds you to acknowledge that we’re not in control of the course of the economy.
Whatever stance you take, in order to play it safe, Cramer recommends that your portfolio have international exposure, stocks that are mostly immune to weakness in the United States while paying out high yields.
Thus far, Cramer has recommended two Brazilian utilities, a Canadian pipeline operator, a Norse oil producer, and a Latin American bottler. It’s been Cramer’s advice of the week to have about 20% of your portfolio invested overseas, in stocks that will pay you juicy yields.
Wrapping up the week, Cramer is recommending another foreign name that stands out from the pack. This final foreign legionnaire pays good dividends, allows you to catch currency gains from a weaker dollar, and has the added benefit of exposure to a stable foreign economy while still keeping some ties to the US.
Cramer’s newest foreign legion member is none other than IESI-BFI , a Canadian garbage company.
Admittedly, garbage is a stinky business, but it’s a stinky business that’s stable. There are American companies Cramer has suggested in the past: Waste Management and Republic Services , both have healthy dividends, but aren’t the same as BIN.
Cramer points out that BIN is the second largest waste company in Canada and the fourth largest in North America, with 72 underlying collection companies, 34 transfer stations, 22 landfills and 20 recycling facilities. It has its roots in Canada, but a few years ago it decided to enter the United States and now it gets just 32% of its revenues from Canada with the majority coming from the US, although the Canadian business is more profitable because they’ve been doing business there longer.
But why buy this company over its American counterparts? The answer is simple: BIN has room to improve, room to grow and room to increase earnings through internalization and consolidation, Cramer says. The company is expanding by acquiring some waste hauling companies and developing its dynamic. Plus, Cramer says, it’s got a cleaner balance sheet than its peers.
Cramer's bottom line: Garbage is as good as gold when it comes to protecting your portfolio, Cramer says, and a garbage collector produces mountains of cash. To see Cramer’s full analysis of BIN, check back for the video!