This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

December 16, 2011 - U.S. Ecology, Inc. (ECOL-NASDAQ), through its subsidiaries, provides waste treatment, disposal, recycling, and transportation services to commercial and government entities in the United States. The company offers its services for hazardous, polychlorinated biphenyl, non-hazardous, radioactive, and industrial wastes.

What caught my eye about ECOL was the healthy dividend and potential for growth. With a 72 cent annual payout, the stock currently yields 4.2%. The other eyecatcher: it's only a little over $300 million in market cap. Proceed with care.

This is a little engine that can. Earnings will most likely be 47% ahead of last year, coming in at 96 cents a share if the consensus from 4 analysts is correct. Last year, they tallied 65 cents. For 2012, consensus is for $1.07.

Revenues saw a similar jump, going from $104.84 million last year to $152.33 million this year, if the analysts' estimate are correct. That's an improvement of 45.3%. Next year, expectations are for $163.28 million or another 7.2% increase.

In the first 3 quarters, earnings were above last year by 57%. The reasons: higher prices and more volume in the oil-recycling business which is a major contributor to the company's base business. Also helping were higher event revenues, increased by the beginning of a remediation project for an electric utility and a large waste-removal program in and near the Hudson River for General Electric.

Management is spending money to expand capacity. This year, capital expenditures were boosted to $14 million, up 50% above last year's budget. Analysts see similar spending over the next 3 years. Facilities in Texas, Nevada and Idaho used for landfill and incoming rail-freight capacity are the priorities. Earlier this year, money was allocated to improve the company's thermal recycling (used for byproducts of oil refining) business.

Analysts think profits will continue to grow at a rate of 15% a year for the next several years with more profits generated from larger landfills, more thermal recycling, and Stablex (a Canadian company purchased in November of 2010 that treats and disposes hazardous waste throughout the United States and Canada). Further contributions will come from more acquisitions, though they should be small. Expanded services for the treatment of oil refining products are also in the pipeline. Expect the company to win more than its fair share of contracts for large hazardous-waste remediation projects due to its technological expertise and large disposal capacity.

Essential Numbers:
- Trailing P/E: 19.46
- Price to sales ratio: 2.05
- Price to Book: 3.27
- Operating margin: 20.83%
- Profit margin: 10.6%
- Return on equity: 17.19%
- Return on assets: 11.97%
- Total cash: $6.06 million
- Cash per share: 33 cents
- Total debt: $48 million
- Debt/Equity: 50%
- Current ratio: 1.45
- Book value per share: $5.27
- Beta: 1.0
- 52 week change: 4.88%
- Shares Outstanding: 18.22 million
- Float: 17.98 million
- Held by insiders: 1.78%
- Held by institutions: 62.4%
- Annual dividend: 72 cents
- Yield: 4.2%
- Payout ratio: 81%

Aggressive investors will find this story compelling. The market for ECOL's services is ever expanding. While it's up against some strong competition (like Waste Management (WM)), it has certain technological advantages and is expanding its capacities. Expect better numbers for some time to come from this small but growing company.