Let's talk about the story of two garbage haulers, one that is extremely pricey and one that we just added to the Dividend Growth Newsletter portfolio. Casella has experienced an impressive growth spurt during the past few years, and we model in substantial growth in the coming years, but now the rally in CWST has gotten ahead of itself. Given the unsystematic risks Casella faces and the enormous amount of growth priced into its stock, shares of CWST could fall materially should the company stumble. We prefer the stability and strength of Republic Services in terms of its large geographical footprint, managed debt maturity schedule, investment-grade credit ratings, and free cash flow growth outlook. Republic Services also pays out a nice dividend with room for substantial payout growth, while Casella is using its free cash flows to fund its growth ambitions. We like Republic Services as a top quality defensive addition to our Dividend Growth Newsletter portfolio. The non-hazardous solid waste disposal industry is quite lucrative and one that offers a lot of upside, keeping in mind the current economic expansion is long in the tooth. Having some exposure to more defensive industries is a prudent move, in our view.
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