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It's A Dirty Job, But Someone's Got To Do It

|Includes:US Ecology, Inc. (ECOL)

Hazardous waste is a problem.

Way back in the 16th century, tanners and butchers were banned from keeping shops on Florence's Ponte Vecchio bridge because their industrial waste polluted the Arno River. The city of Niagara Falls, NY will always be remembered for its Love Canal neighborhood, built on a dump site and later demolished. And in 2003, a quarry near Cardiff, Wales erupted, sending toxic fumes into the air - a nasty shock for area residents, who had no idea that Monsanto Chemical had used the site for illegal dumping in the '60s and '70s.

Companies with ethical and environmental concerns often seek to reduce or eliminate their hazardous waste. This is wonderful, but what about companies who haven't reached that point yet? Chemical plants, oil refineries, factories, steel mills, biotechnology companies, medical institutions, and even the military produce waste that can't simply be left in a landfill or poured down a drain without causing harm. That waste has to go somewhere, and must be handled safely.

Enter US Ecology, Inc. (NasdaqGS: ECOL). US Ecology has provided safe disposal of radioactive waste since 1952, and added hazardous waste services in 1968 - one of the few companies in the USA to handle such delicate work. The company places safety at a premium - all four of their operating sites participate in OSHA's SHARP and VPP programs, which recognize small companies with exemplary health and safety management. US Ecology even posts its operating permits and compliance records online. That level of transparency is a far cry from Monsanto's sneaky dumping in Wales!

US Ecology handles transportation, treatment, disposal, and (where applicable) recycling of hazardous and radioactive waste from a variety of sources, with sites in Nevada, Idaho, Texas, and Washington. Companies and government agencies in much of the USA could easily rely on US Ecology for waste management because it has multiple distant locations, and many already do. The company even offers offsite management services for medical waste, mercury, batteries, cyanide, e-waste, and other refuse. Rather than exclusively using gas-guzzling trucks, US Ecology also takes the greener step of transporting waste largely by train, maintaining a dedicated fleet of rail cars for safety reasons.

US Ecology has adequate working capital and sufficient operating cash flow to handle its manageable debt, given its fairly consistent net income levels. The modern world shows no signs of eliminating hazardous waste anytime soon, so US Ecology should continue to deliver earnings for some time.

US Ecology stock is currently trading at $19.25. Two years ago the stock was trading at a high of $32.82, and it is reasonable to believe that in the future the stock will regain its former highs. Because US Ecology also handles waste management for government entities, tighter environmental legislation may well give the company a healthy boost. The stock even pays a 3.7% dividend! I suggest buying under $19.50 and holding US Ecology on a long-term basis. Waste management is a dirty job, but until we can learn to live without chemicals, someone's got to do it.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: ECOL