Owning shares of Waste Management is a bit like having a stake in a collection of small near-monopolies. Building a landfill requires a lot of cash, involves miles of red tape, and faces intense blowback from the locals. These challenges keep competition at bay and have helped lead to consolidation and better pricing in the industry.

It gets better
For starters, there's no real chance that technological obsolescence will undercut Waste Management's service offering. In other words, Waste Management won't play the Yahoo! (Nasdaq: YHOO) to anyone's Google (Nasdaq: GOOG). Another plus: Waste Management doesn't have to spend gobs of cash on research and development every year simply to maintain its competitive position. Waste hauling is as static a business as it is boring -- and that's a good thing.

And unlike with oil, gasoline, and other high value-to-weight commodities, it doesn't make economic sense to haul trash over long distances. That means you don't have to worry about distant competition threatening your localized pricing, as it often does in other industries -- picture local newspapers' classified rates before and after eBay (Nasdaq: EBAY).

Now, take the ability to set local prices with minimal competition, combine it with the rational pricing of this consolidating industry, and it's little wonder that Waste Management and the other major waste haulers are able to push around their customers, consistently raising prices on their largely captive customer base.

Dumping it all together
There's a lot to love about such sturdy, growing dividend payers -- just ask one of the company's largest investors, Bill Gates. Waste Management is typical of most Income Investor recommendations: strong, well-managed, and boasting healthy cash flows and a sustainable dividend.

On the surface, there isn't much pizzazz to dividend-focused investing, but as Jeremy Siegel's research and Income Investor's results have shown, the strategy is a proven winner.

Since the newsletter's inception in 2003, the average recommendation (which currently yields 5.5%) has returned more than four percentage points more than the S&P 500. Subscribers receive fresh stock ideas each month, access to all past recommendations, and the team's top seven recommendations for new money now. You can try the service free for 30 days with no obligation to subscribe. Click here to get started.

This article was first published Aug. 29, 2008. It has been updated.