4 Unglamorous Businesses That Keep Compounding While Nobody Watches

Garbage trucks, uniform delivery routes, elevator mechanics and parts bins rarely make headlines, and that is much of their appeal. These businesses sell services customers need whatever the economy is doing, usually under contracts that renew without much fuss. Over long periods the results add up. On an adjusted basis, one of the four names below rose an incredible 693.66% over the past ten years. For each company, here is what it does, why demand holds up, what its record shows and what could go wrong.

Waste Management: Trash Pickup With Price Escalators Written Into the Contract

Waste Management (NYSE:WM | WM Price Prediction) collects, transfers, recycles and landfills municipal, commercial and industrial waste across North America. It also runs the Stericycle healthcare waste business and a fleet of renewable natural gas plants (collection, disposal, healthcare waste and RNG). Trash collection can’t be skipped, and its municipal and commercial contracts are long-dated with contractual price escalators.

The dividend record shows how the company behaved in the last two downturns. During the financial-crisis recession, the quarterly payout went from $0.29 in 2009 to $0.315 in 2010. Around the pandemic, it went from $0.5125 in 2019 to $0.545 in 2020. The records show quarterly payments in every year from 2009 through 2026, and the current payment is $0.945. The yield is modest, so the dividend matters here as evidence of steadiness more than as a source of income.

The pricing power shows up in the numbers. Core price was 5.7% in the second quarter of 2026. Labor costs rose about 4% while collection operating costs rose less than 1.7%. Adjusted operating EBITDA margin expanded 40 bps to 30.9%, and management raised its full-year margin guidance to 31.0% to 31.2%. The stock has a beta of 0.43, and on an adjusted basis it rose 298.4% over ten years, though it is down 4.29% year to date.

Risk: volume. Collection and disposal volume fell 1.8% year over year in the second quarter. Management said most of the weakness came from lost national accounts in commercial, and it narrowed full-year revenue guidance to $26.275 billion to $26.475 billion. At about 29 times trailing earnings, the stock already prices in a lot of that steadiness.

Cintas: Uniform Routes Customers Rarely Unwind

Cintas (NASDAQ:CTAS) rents and launders workplace uniforms, mats, mops and restroom supplies. It also sells first aid, safety and fire protection services. Most customers are small and mid-sized businesses on multi-year route-based contracts. Cintas serves about 1 million customers in an addressable market management puts at 16 to 20 million businesses.

Restaurants, hospitals and factories still need clean uniforms and stocked restrooms in a recession. Through the 2008 and 2009 downturn, Cintas’s then-annual dividend went from $0.46 in February 2008 to $0.47 in February 2009 and $0.48 in February 2010. Management says the company has historically grown at multiples of GDP and employment growth, and that outsourcing can become more valuable when conditions are uncertain.

The margins tell the story. Gross margin expanded 120 bps to 51.5% in fiscal first-quarter 2027, an all-time high, and operating margin rose to 23.6% from 22.7%. Management credits route density and productivity more than price increases. It described pricing as “consistent with prior years”, and the company manages fuel costs without surcharges. Adjusted shares rose 108.12% over five years, and the latest quarterly dividend rose to $0.52 from $0.45.

Risk: the pending acquisition of UniFirst (NYSE:UNF) is under FTC review after a second request. Regulators could delay the deal or attach conditions. With the stock at about 39 times trailing and 36 times forward earnings, the valuation leaves little room for an integration stumble.

Otis Worldwide: An Installed Base That Needs Servicing for Decades

Otis Worldwide (NYSE:OTIS) makes and installs elevators, escalators and moving walkways. The steadier part of the business is servicing a portfolio of about 2.5 million units. Elevators need required maintenance and inspection across a decades-long life, and building owners rarely switch service providers. Service brought in $2.58B of second-quarter revenue of $3.86B.

Otis began trading independently in March 2020, at the start of the pandemic. Its quarterly dividend was $0.20 through 2020 and has been raised every year since, reaching $0.44 in the latest payments. In the second quarter, maintenance pricing added 3%, repair sales grew 12% and modernization organic sales grew 24%. The modernization backlog is up 26% at constant currency. Management also said it broadly offset the effects of the Middle East conflict through pricing actions.

The stock has had a rough stretch. Shares are down 22.49% year to date, and the gain since March 19, 2020, is 62.96%. At about 15 times forward earnings, it is the cheapest of the four.

Risk: service execution. Service operating margin fell 170 basis points to 23.2%, and customer retention outside China slipped, mostly in parts of the Americas. Management is spending $50 million this year on service quality and pricing to win customers back. Meanwhile, China New Equipment sales fell by a high-teens percentage.

Fastenal: Supply Bins Installed on the Customer’s Factory Floor

Fastenal (NASDAQ:FAST) distributes fasteners, tools, safety supplies and maintenance parts to manufacturers and construction customers. It sells through 1,500+ branches and 140,000+ vending machines and bins installed at customer sites. Industrial demand is cyclical, which makes Fastenal the most economically sensitive name here. Its durability comes from that physical lock-in. Contract customers now account for 75.8% of revenue, up from 73.2% a year ago.

Through the 2020 downturn, the dividend records show four regular payments of $0.25 plus a $0.40 payment in December. This year, management said tariffs affected the business “through cost planning and pricing discussions rather than demand.”

Price increases added about 290 bps to second-quarter sales growth and 350 bps in the first quarter. Gross margin narrowed 75 bps, but lower overhead as a share of sales (80 bps) more than made up for it, and operating margin rose to 21.0%. The departing chief executive put return on invested capital in the low 30s. Adjusted shares rose 528.49% over ten years, and the latest dividend rose to $0.26 from $0.24.

Risk: valuation. After a 29.78% gain this year, the stock trades at about 43 times trailing earnings. The average analyst target of $48.84 sits below the current $51.24, and 3 analysts rate the stock a strong sell.

What These Four Share

All four rely on recurring service, customers who find switching costly and margins that have mostly held or widened over time. As Otis shows this year, their share prices can still have long, dull, or painful stretches. For investors building a long-term core, the operating record matters more than any one quarter. Upcoming earnings reports should tell us if pricing and route density keep doing their quiet work.

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