 Most investors dont give waste disposal stocks much attention. While its not a glamorous sector, its produced above-average returns over the decades. In particular, Waste Management NYSE:WM stock has been a huge winner.Source: rblfmr Shutterstock.com Over the past 20 years, WM is up more than 500. Investors would have made nearly 1,000 over the same time span if they reinvested their dividends into more Waste Management shares.The companys appeal has grown with the novel coronavirus. Investors are looking for safe haven plays that are largely insulated from economic shocks. And while trash disposal isnt entirely recession-proof, it holds up pretty well. The companys stock has bounced back quickly from the March shock as investors realized that the core business remains strong.InvestorPlace - Stock Market News, Stock Advice Trading TipsAs if current events werent exciting enough, Waste Management also has a major acquisition in the works. The company is attempting to acquire Advanced Disposal NYSE:ADSW. Advanced Disposal is a mid-sized operator, as it owns 40 landfill sites currently. Waste Management, by contrast, has nearly 250. Thus, while not a huge deal, its enough to add materially to the company. 10 Robotics Stocks on the Technological Cutting EdgeHowever, the Department of Justice hasnt yet given anti-trust approval for the merger either as thered be a great deal of overlap in markets such as Chicago.So how does the Waste Management story look at this point with the economic shock and also its planned acquisitions in the works? Lets take a closer look. More Than Meets the EyeAt first glance, you might assume Waste Management is a pretty simple business. They send their trucks around periodically to your house, take the trash to the landfill, and thats that. However, the business is significantly more complex - and profitable - than that.Waste Management also collects trash from commercial and industrial tenants, who have far higher waste needs than most households. Additionally, Waste Management owns tons of landfills beyond what it needs for its own collection routes. It, in turn, sells this landfill capacity to locally operated third parties that run their own disposal routes.This makes Waste Management a landlord with scale as it secures landfill sites around the country with cheap capital and then services them out to third parties for a nice margin. Theres also a recycling division. A Strong Competitive AdvantageWaste Management has earned above-average profits, and thus delivered stellar shareholder returns, because its business is protected from many competitive pressures. For one thing, its very difficult to obtain regulatory approval for new landfills in much of the country. Thus, the existing property owners can charge high prices for capacity.In addition, there are just a few major national companies in the space. Waste Managements key rivals are Waste Connections NYSE:WCN and Republic Services NYSE:RSG. However, once you go past those, competition tends to be local and not have much scale. This ensures a good deal of pricing power for the large players.It also creates an ample mergers and acquisitions MA; pipeline, as Waste Management can buy out small operations to add additional scale. Coronavirus ImpactThe virus has had a mixed impact on the companys overall business. Volumes in some areas, such as residential, are robust as people spend more time there thanks to quarantine. On the other hand, industrial demand is down, and in some areas, commercial demand in particular is off sharply.This looks to cause a mid-single digits overall decline in Waste Managements business for the year. The recycling business also faces pressure. A weak overall economy causes demand for recycled materials to fall, hurting the companys margins there.However, recycling had been sluggish since 2017 thanks to issues with demand out of China, so the drop here may be less than youd normally expect as prices were already low prior to the virus. WM Stock VerdictWaste Managements huge and highly integrated business offers some perks but also a few drawbacks. Investors have focused on the negatives thanks to the virus. Yes, demand will be down from commercial disposal and also as recycling prices stay depressed.Its not clear that the virus will have any negative long-term impact on Waste Management, though. While a shift in restaurants from on-location eating to delivery may kill a mall or shopping center owner, it doesnt matter to a trash company: all those pizza boxes still have to be taken care of one way or another.That is to say that landfills are a flexible and adaptive asset. The economy is experiencing rapid transformation right now, but theres little sign it will change humans basic desire to consume vast quantities of goods and services.On a valuation basis, Waste Management isnt particularly cheap, as it sells with a price-earnings ratio of around 26. On a normalized basis, using 2017 and 2018 earnings as the benchmark, the ratio is closer to 23. Assuming the economy recovers reasonably quickly, earnings should return to at least those levels. Earnings could go higher once the Advanced Disposal acquisition takes place, assuming the government gives regulatory approval.With those factors in mind, Waste Management should get to an EPS of 5 within the next couple of years. That would result in a reasonable earnings multiple of 21. Its hard to argue that WM stock is especially cheap, but its a fine pick as a defensive play with a decent growth profile.Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a 300 million New York City-based hedge fund. You can reach him on Twitter at irbezek. At the time of this writing, he held no positions in any of the aforementioned securities. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000 Winner The 1 Stock All Retirees Must Own Look What Americas Richest Family Is Investing in Now The post Dont Throw Away Your Waste Management Stock appeared first on InvestorPlace. 