Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Every Investor Should Invest in Water

Companies / Water Sector Nov 08, 2019 - 06:51 PM GMT

By: Robert_Ross

Companies

This might surprise you, but water is a fantastic investment.

Take water utility stocks like American Water Works (AWK) and Consolidated Water Co. (CWCO), for example. In the past six months alone, their stocks have shot up 19% and 28%, respectively.

Industrial water companies like Danaher Corp. (DHR) are also on a great run. Danaher has climbed 10% in the last six months:




That’s pretty substantial, especially compared to the S&P 500’s 3% gain during this stretch.

Water Stocks Offer a Safe Haven

Stock market volatility is part of the reason water stocks are doing so well right now.

You probably know that US stocks have had a rollercoaster year. In August alone, there were five days when the S&P 500 rose or fell 1%. (This only happened on eight days during all of 2018.)

Add in trade wars, the impeachment circus, a yield curve inversion… and you get a lot of nervous investors.

At the same time, stocks are flirting with all-time highs. And we’re at the tail end of the longest bull market in US history. So investors are rightfully skittish.

When stock market risk rises, investors flock to safe and reliable stocks. And water stocks fit that bill.

Water utilities are my favorite type of water stock. These companies process and deliver water to cities and towns. They’re often highly regulated, which limits profits. But it also keeps out competition.

Water infrastructure and equipment companies are another good option. These companies work with water utilities and the industrial and commercial sectors to improve water treatment and transport options.

Either way, you want some exposure to the water industry right now…

People Always Need Water

Remember when stocks fell 20% between September and December last year?

Water stocks bucked the trend. In fact, California Water Services Group (CWT) and American States Water (AWR) rose 8.2% and 4.7%, respectively, during that period.



Same story for water infrastructure firm AquaVenture Holdings Ltd. (WAAS). While the S&P 500 was in freefall, AquaVenture shot up 9.0%.

Meanwhile, Brazilian water giant Sabesp (SBS) beat them all, soaring 32%:



This all makes sense when you think about it. People always need water, period. That doesn’t change when the broader market is heading south.

Less Than a Penny Per Gallon

Of course, water is essential for sustaining all life on Earth. So, it’s no surprise that water infrastructure, treatment, and transportation companies run very stable businesses.

On top of that, long-term trends like population growth and a shrinking supply of fresh water from rivers, lakes, and aquifers can only push demand—and prices—higher.

However, right now, water in the US is downright cheap. The average price is about $1.50 per 1,000 gallons, or less than a penny per gallon.

But you can still make a lot of money off it…

There are 327 million people in the US today. That figure could climb as high as 440 million by 2050.

Meanwhile, Americans use 80 to 100 gallons of water per day, on average. So we need every last drop of water we can find.

This is why the US government is investing heavily in water infrastructure. By 2027, investment in municipal water infrastructure will rise 11%. And private spending on drinking water infrastructure will total $60 billion, according to accounting firm PricewaterhouseCoopers.

Over the next 25 years, total spending on wastewater treatment alone will exceed $10 billion a year.

These steady and predictable investments help make US water stocks some of the safest investments on the market.

The Best Ways to Invest in Water Right Now

There are a handful of ways to invest in water. For income investors like us, the best route is water utilities like American Water Works (AWK) and Consolidated Water Co. (CWCO).

Water infrastructure companies like Xylem (XYL) also offer solid opportunities. Although it has underperformed the S&P 500 and water utilities year to date, it has beaten the market over the last 36 months.

If you prefer the ETF-route, my favorite is the Invesco Water Resources ETF (PHO). It holds everything from utilities to infrastructure companies, and it pays a small 0.5% dividend yield.

That said, I usually prefer buying individual stocks, since they offer more upside. But for investors who want a broad slice of the water market, an ETF is a suitable choice.

Either way, water belongs in every income investors’ portfolio.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in