What is the circular economy and why does it matter for investors?

The circular economy is an economic system designed to eliminate waste and continually reuse resources. Instead of the traditional "take-make-dispose" model, it focuses on reducing, reusing, recycling, and recovering materials. For investors, this represents a growing market opportunity as companies that can successfully implement circular business models often reduce costs, mitigate supply risks, and appeal to sustainability-conscious consumers and partners—potentially leading to competitive advantages and long-term growth.

How do waste management companies generate profit from trash?

Waste management companies make money in several ways: they collect fees for pickup and disposal services, sort and sell recyclable materials like paper, glass, and metals to manufacturers, convert organic waste into compost for sale, generate and sell renewable energy from landfill gas or waste incineration, and develop specialized solutions for hazardous materials. The most innovative companies in this sector have transformed from simple disposal services into sophisticated resource recovery operations that extract maximum value from what most consider worthless.

What is PET resin and why is recycling it valuable?

PET (polyethylene terephthalate) is one of the most common plastics, used in everything from water bottles to clothing fibers. Recycling it is valuable because virgin PET production is petroleum-intensive and contributes to plastic pollution. Companies that can efficiently convert used PET back into virgin-quality resin create multiple benefits: they reduce waste heading to landfills, decrease the need for new petroleum resources, lower carbon emissions, and meet the growing demand from brands committed to using recycled content. This creates a profitable business model while addressing environmental challenges.

What does "supercritical water oxidation" mean?

Supercritical water oxidation (SCWO) is an advanced waste treatment process that uses water at extremely high temperatures and pressures—beyond its critical point (374°C and 218 atm). In this state, water becomes a powerful solvent that can rapidly break down complex organic compounds in waste. The process effectively destroys harmful substances while producing clean water, recoverable minerals, and thermal energy. It's a highly efficient technology for treating difficult wastes including industrial sludges, medical waste, and contaminated materials that conventional methods struggle to process safely.

How do dividend yields relate to these waste transformation companies?

Dividend yield shows how much a company pays in annual dividends relative to its stock price, expressed as a percentage. Many established waste management and resource recovery companies offer dividends because they typically generate stable cash flows from their ongoing operations. While younger, technology-focused transformation companies might reinvest profits into growth rather than pay dividends, mature players in this sector often provide investors with income in addition to potential stock appreciation. When considering these stocks, the dividend yield helps you understand the income component of your potential return.

15 handpicked stocks

The Alchemists

These innovative companies have mastered the art of turning the overlooked into gold. Carefully selected by our expert analysts, this collection features businesses that create real value from waste materials, industrial byproducts, and untapped resources—transforming the ordinary into extraordinary profits.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 17