The world’s population is expected to increase by 2 billion over the next 30 years to almost 10 billion. People are already dying from lack of clean water and sanitation and the situation is expected to get worse. Xylem has regularly raised its dividend since its IPO in 2011, and it now pays a 1.3% dividend yield. Xylem’s revenue rose in 2022, up 7%, and an easing semiconductor supply helped boost revenue from its measurement and control solutions division in the second half of the year. Essential Utilities currently pays a 2.7% dividend yield and has a long history of raising its dividend.
- In fact, many fund managers refer to water, which humans need to survive and businesses to thrive, as the new oil.
- American Water Works Company is the largest US water utility company with a market capitalization of nearly $25 billion.
- The first of these investors that predicted the housing bubble was Dr. Michael Burry, who is portrayed in The Big Short by Christian Bale.
- There are so many different companies globally helping to combat the water-scarcity crisis—from a variety of sectors too.
- There are currently numerous ways to add water exposure to your portfolio; most simply require a bit of research.
- These investments not only provide financial returns but also contribute to addressing one of the most pressing global challenges.
As a water utility, York’s growth is determined by the number of customers, as well as water and wastewater rates. Because it can’t directly control prices, the best way for the company to grow is by increasing its customer base. Like most water utilities, American Water Works delivers a steady stream of predictable revenue. Nevertheless, AWK stock price has increased by over 100% in the last five years as of June 2022.
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Steve Rogers has been a professional writer and editor for over 30 years, specializing in personal finance, investment, and the impact of political trends on financial markets and personal finances. Dillon Jacobs is a passionate value investor who believes in the fundamental principles of investors like Warren Buffett, Charlie Munger, Ben Graham, Peter Lynch, and many more. A related area that is growing in popularity is water monitoring. Spending on digital water hardware, software, and services that check for water quality is growing at a rate of approximately 7% per year. Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.
- That demand is increasingly coming from international markets.
- In the past three years, shares of AWR have surged by 1.1% against the industry’s 8.9% decline.
- Considering its dividend and growth history, a more efficient Algonquin may prove to be a powerful addition to your portfolio.
We think nothing of turning on the tap and having clean, fresh water available at our fingertips. However, the reality is that water scarcity is a growing concern worldwide. With concerns in the UK water industry over raw sewage, customer bills, and company debt levels, it becomes crucial to explore the landscape of the water sector for potential investment opportunities.
Like gold and oil, water is a commodity—and it happens to be rather scarce nowadays. So, as with any other scarcity, the water shortage creates investment opportunities. If you’re buying individual stocks or ETFs, you can place an order by entering the brokerage firm’s site and searching for the company or ETF ticker.
ROE indicates how efficiently a company utilizes its funds to generate higher returns. AWR’s ROE is currently pegged at 13.1%, higher than the industry’s average of 10.3%, which indicates that the company is utilizing its funds more efficiently than its peers. The Zacks Consensus Estimate for AWR’s 2023 earnings per share (EPS) is pegged at $2.96, increasing 0.3% in the past 60 days.
Utilities: Keeping your lights and water on
The Invesco Water Resource Portfolio ETF (PHO) is the largest, with a U.S.-centric basket of 38 holdings (as of Feb. 2022) that tilts toward mid- and smaller-cap companies. Just like the electrical grid, the world’s water infrastructure will need to be upgraded. This is one of the largest investments that utilities and other water-related companies need to make.
Secrets to Quick Profits this Earnings Season
Water lines (11,170 kilometres) also make up a significant portion of its infrastructure and are worth about $1.7 billion. As a micro-cap company catering to a limited market, BQE Water may not seem as promising as other water stocks with a much wider reach. Still, it’s well-positioned to take advantage of the shifting corporate focus on ESG. So from an investment perspective, investing in the best water stocks in Canada could be an interesting proposition. Invesco also offers a global version of this fund, the Invesco Global Water ETF (PIO).
We are not contractually obligated in any way to offer positive or recommendatory reviews of their services. Investing in individual stocks can help you reap greater returns, but that potential is offset by greater levels of risk. All that water has to come from somewhere, so utility companies, well water businesses, and even pipe and infrastructure review mastering private equity set firms are booming. Investors should also pay attention to any latest changes in analyst estimates for Consolidated Water. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Essential Utilities (WTRG) delivers reliable and clean water to 5.5 million customers in 10 states and upgrades aging water infrastructure to enhance services. For example, Lake Mead, North America’s largest manmade water reservoir, serves as the primary water source for many states, including California, Nevada, Arizona, and New Mexico. It is now at unprecedented lows in terms of capacity, causing widespread negative impact on both people and agriculture.
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Is investing in water stocks right for you?
Lake Mead, the country’s largest reservoir, is near record lows, facing persistent drought conditions. This winter, a train derailment in Ohio made news when it contaminated drinking water. Held a water conference in March that was a call to action to tackle global issues. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. The company has also been a reliable dividend payer, offering a dividend yield of 1.7% as of April 2023.
For example, agricultural and electricity demands can directly impact water prices, as can a decrease in supply due to a prolonged drought. Utilities ETF (IDU) provides some exposure to water-related stocks. Other alternatives soap vs rest web services include the Invesco Global Water Portfolio ETF (PIO), which tracks the Nasdaq OMX Global Water Index, and the First Trust ISE Water Index Fund (FIW). When it comes to bottled water, the market is growing internationally.
Many countries are facing droughts and shortages of clean water. Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions. Their need for power is causing utilities to retreat on green energy. For instance, the power consumption of Nvidia’s new GH200 server cluster is about two to four times more than a regular cluster of the same physical size, he estimated. So is the Invesco S&P Global Water Index ETF the right investment for you? I’m afraid I can’t answer that question – only you can decide.
Top 7 water stocks in 2023
I think we’re at a tipping point when it comes to global water scarcity. The 3 main problems exacerbating the crisis of water scarcity include the lack of sufficient infrastructure, a booming population, and climate change. These factors are going to put an enormous strain on an already fragile water system.
Due to insufficient and old infrastructure, about 30%– 40% of water worldwide becomes non-revenue water according to the International Energy Agency. Non-revenue water is water overview of fxcm broker that is lost due to leaks in the pipes, unauthorized use, corruption, or inefficiencies. This is where a SmartBallTM technology from a company called Xylem () comes in.
Think of things like food, beverages, household and personal care products. In contrast, low-beta sectors, typically more resistant to market swings, can stand firm or even flourish during such turbulent times. It’s crucial to understand that not all sectors feel the weight of a bear market equally. Sectors with a high “beta” — a measure of a stock’s volatility in comparison to the overall market — can experience sharp declines. But you should also consider its strengths, international reach, and a focus on renewables when evaluating this investment.