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
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Water Stocks About to Get $1 Trillion Boost

Companies / Water Sector May 29, 2013 - 02:01 PM GMT

By: Money_Morning

Companies

Greg Madison writes: The American Society of Civil Engineers has just released its annual Report Card for America's Infrastructure, which grades several critical areas: water and environment, transportation, public facilities, and energy.

And that report card is nothing we'd like to take home to Mom and Dad, moving as it has from a D to a D+ over the last four years. In short, there remains a lot of room for improvement.


The Report Card suggests that the United States government will have to spend roughly $3.6 trillion on infrastructure building to get to a passing grade - at least above a "gentleman's C."

According to the American Water Works Association, nearly one-third of that sum - $1 trillion - will need to be spent on that most indispensable resource: water, and that makes for plenty of investment opportunities in water stocks.

Although ASCE found that American drinking water quality is universally high, with few outbreaks of waterborne disease, the mechanism for getting that water to consumers is increasingly under strain.

Why Water Systems are a Mess

ASCE gave drinking water infrastructure a D grade. The pipes and main lines that supply water to America's largest cities are approaching 100 years old and are failing with alarming regularity.

These failures disrupt traffic, interrupt commerce, and ruin streets, to say nothing of the interruption of water service to large numbers of people.

It's not just the cities that are feeling the pressure of crumbling water infrastructure. Rural areas may have it even worse when it comes to availability of water to drink and use for agriculture.

The infrastructure situation is grim, but there's significant potential upside to solving the problem, setting aside for a moment the fact that we all need water to live.

That $1 trillion is likely to come from a combination of government and private sector spending, and that means there's money to be made in water stocks.

The people making the money will be those grabbing the contracts, helming these projects, and their investors. The impact across potable water infrastructure, industry, and agriculture will be profound.

Investing in Water Stocks

The United Nations says that the first "real" pangs of any American water crisis are still decades off. But plenty of companies have had the foresight to get in before matters reach a crisis level. They're growing - and posting revenues - now.

There are many different ways to invest in water stocks, from direct investment to ADRs to baskets like ETFs.

Here are a few choice picks that will benefit from an unstoppable trend.

If you feel that broad exposure to a variety of water stocks would suit you, you might consider PowerShares Global Water Portfolio ETF (NYSE: PIO). A veritable one-stop shop for water companies and utilities, this ETF tracks a wide basket of stocks. Shares of PIO are up better than 11% for the year, and yielding a modest 1.26% - still better than Treasuries. The ETF is all the more compelling because of its exposure to foreign markets like Brazil and Southeast Asia, where growth is strong.

Xylem Inc. (NYSE: XYL) was spun off from manufacturing titan ITT Corp. (NYSE: ITT) in 2011. Xylem does about two-thirds of its business outside the United States, and it is a major water infrastructure player around the world - wherever water projects are being undertaken. The stock is now testing 52-week highs and yields 1.66%.

The utility Aqua America Inc. (NYSE: WTR) is a holding company for a group of utilities. Together, they serve about 3 million customers in 13 states. This stock yields 2.35%, and the company has grown steadily over the last five years, an average of 8% annually.

Another global play is Companhia de Saneamento Basico do Estado Sau Paulo (NYSE: SBS). This Brazilian giant provides water and sanitation to nearly 24 million people in the South American powerhouse. SBS is wired into a market that will do nothing but grow in the coming years. The best part? It yields close to 9%.

The problem is clear, inasmuch as we've acknowledged a problem exists. The way forward is clear, if we can muster the political will to spend $1 trillion on something that isn't jet-powered, and doesn't hurl bullets and missiles or have better than 56,000 rushing yards.

There is a good supply of political will behind fixing water infrastructure. According to a poll by Xylem, 88% of respondents said the government should be investing in water infrastructure upgrades, and 66% of respondents said they would accept a slightly higher water bill to pay for it.

As Benjamin Franklin reminded us, "When the well is dry, we will know the worth of water."

Let us know what you think of the #watercrisis on Twitter ;@moneymorning. Or sound off on our Facebook Wall.

Source :http://moneymorning.com/2013/05/28/why-water-stocks-are-about-to-get-1-trillion-boost/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 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