Synagro Technologies: Waste and want not

If you're a company looking to recycle your bio-solids or other organic products, or if you're a city that needs its waste water treated, Synagro Technologies, Inc.(NASDAQ: SYGR) may be the company for you. This Houston-based company is one of the largest companies in its industry, if not the largest. It has water treatment operations in 37 states and the District of Columbia. Beyond water treatment, it shows companies how to reuse materials through composting, incineration, and pelletization, and it also offers clean-out services for facilities and it helps companies comply with regulatory issues.

If you look at the stock price you might wonder why I'm recommending this pick. It hasn't moved much above $5.50 for a few years. For the most part it has ranged from about $3.50 to $5 which isn't surprising given that its revenues have been increasing at just a few percentage points each year. Meanwhile, the insiders have all been selling of late.

But if you look at the dividend and at the general stability of the stock price, I think this is a nice steady pick that isn't likely to drop too much and will also deliver a dividend yield of more than 9%.

I also think you might end up seeing the stock price climb if you hold onto it long enough. Interest in maximizing efficiency and using waste is only going to grow in coming years, and Synagro should benefit from being one of the largest companies in the business. While its revenues aren't shooting up, its operating income has been growing. This year's results don't look quite as good, but again, have a little faith and some foresight. If you remove a one-time real estate gain from last year, 2006 has actually been an improvement on 2005 -- and this in an industry that is still struggling with its margins.

Type of stock: An eco-friendly company with a strong dividend yield to keep you happy until the company really gets going.

Price target: I think this is a safe bet at its current price of $4.40. If you buy now, you can enjoy the dividend with little risk, and maybe even see some unanticipated upside as the green revolution continues.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.