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This story appears in the January 24, 2017 issue of Forbes. Subscribe
Related article: Meet Rubicon Global, The Startup Using Uber's Playbook To Disrupt Your Trash
Marilyn Cohen is founder and CEO of Envision Capital Management, a Los Angeles fixed-income money manager.
One of the ways giant garbage haulers like Waste Management (WM) and Republic Services (RSG) got so big was through acquisitions. If Rubicon is really the Uber of the garbage business (see Meet Rubicon Global, The Startup Using Uber's Playbook To Disrupt Your Trash,) it could be a perfect future acquisition for one of the industry giants. With Waste Management’s stock hitting all-time highs, think bonds.
Steady businesses like garbage hauling are tailor-made for throwing off the income streams bondholders love . Waste Management bonds maturing on March 1, 2025, yield 3.2%. If disruptors like Rubicon can prompt an old industry to reboot itself, Waste Management could get upgraded from Baa2/A- to A+ or better.
