Investing in water stocks is investing in the growing need for sustainable water infrastructure and fresh water solutions.
Even though the earth is approximately 70 percent water, less than 1 percent is drinkable. The rest of it is either salty ocean water or it is trapped in glaciers.
In addition, even in the U.S. our water infrastructure has been poorly maintained and is in dire need of repair and replacement. According to Energy and Capital, “The American Society of Civil engineers [ASCE] gave the entire pipeline system a D+ grade in its latest comprehensive report card.”
The ASCE estimates that the U.S. alone will need to spend $4.5 trillion by 2025 just to fix the infrastructure. And it will take another $108 billion or so to build or repair water and wastewater structures.
Needless to say, fresh water scarcity is a global issue.
In developing and third-world countries, experts estimate 1.2 billion people experience physical water scarcity, where water is not available due to climate and environment.
Another 1.6 billion people live with economic scarcity, where water can be found but it requires more resources to make is accessible or drinkable.
According to The Motley Fool, “One of the interesting things about water is that there’s no lack of it or difficulty in finding it: the problem is ensuring its quality (for both potable water and wastewater) and transporting it to the right places. This means there’s likely to be good long-term demand for companies serving the market.”
Specific water stocks are set to benefit from the emerging critical need for sustainable water infrastructure.
Even though my late husband was a financial planner, I don’t pretend to know enough about stocks to make specific comments. Doing so would make me one of Motley’s fools, for sure.
I just know enough to know what to look for and what to avoid, and I know how to research. But I leave the details to my financial planner....
Thus, all I can suggest is that if you see the wisdom in a long-term investment in water, you might want to look into the following:
American Water (AWK)
General Electric (GE)
Dow Chemical Co. (DOW)
Badger Meter Inc. (BMI)
Itron Inc. (ITRI)
Danaher Corporation (DHR)
Pentair plc (PNR)
Guggenheim S&P Global Water Index
Invesco S&P Global Water Index
Further reading . . .