In simple terms, while you might cut back on luxury items or big-ticket purchases during tough times, you’re still going to buy bread, milk, and soap. That’s why the consumer staples sector can be a safer bet during economic uncertainties. The stormy days of the 2022 bear market may be behind us, but the unpredictable nature of financial markets means there’s always another cloud on the horizon. There were several Exchange Traded Funds (ETFs) globally focusing on water, and a few have exposure in Canada. As a utility business, Algonquin should have been financially safer than it currently is, and most of its debt is tied to acquisitions. Many of its clients include battery metal companies mining for metals like zinc and precious metal companies.
In any case, the barriers to entry here mean buying water rights just doesn’t make sense for the average investor. An investor who buys a water right can make money by selling (or frequently asked questions for forex in some states renting out) the water right for a higher price than was originally paid. In fact, water scarcity may be the reason over 700 million people are displaced by 2030.
Other news that has been released and had a positive impact on Mueller’s share price include the contract with Calaveras County Water District to deploy an advanced metering infrastructure network. Evoqua Water Technologies was founded in 2013 and went public on 2 November 2017 at a share price of $18.00. Since its IPO, the stock has had ups and downs, eventually falling to a bottom price of $8.21 per share in March 2020 at the time the coronavirus crisis emerged.
- Holdings must derive at least 50% of revenue from water-industry-related activities and earn high ratings on environmental, social and corporate governance measures.
- As a water utility, York’s growth is determined by the number of customers, as well as water and wastewater rates.
- The topics covered include why water is such a vital resource, why investors should be interested in water stocks.
- By investing in companies that provide water solutions, investors can play a role in ensuring a more sustainable water future.
- In recent years, ESG factors have become central to investment decisions.
- MSEX stock is up 121% in the last five years and the analyst community believes the stock has an 18% upside.
Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Company information can be found on investment websites such as Seeking Alpha, which provides performance histories, charts, and in-depth analyses on their prospects. Many water-related companies may appear on Seeking Alpha’s Utility Stocks screener. Environmental Protection Agency, investments of $473 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, to meet demand over the next 20 years. A delay in repair could cause frequent disruptions in the 24×7 supply of potable water and sewer services. Since December 2020, investors can trade water futures contracts (known as the NQH20 Index) on the Chicago Mercantile Exchange (CME).
In 2020, it entered the natural gas business by acquiring Peoples Natural Gas Company, giving it 750,000 gas utility customers in three states. Recent years have seen an upswing in demand for investments that profit from the need for fresh, clean water. If the trend continues, investors can expect to see a host of new investments that provide exposure to this precious commodity and to the firms that deliver it to the marketplace. If you decide to invest in individual water stocks, you would buy shares of a particular company, such as American Waterworks, Inc., The Danaher Corp., or PepsiCo. Although 70% of the earth’s surface is covered in water, approximately 97% of that water comes in the form of saltwater.
Pumps, valves, tanks and other equipment need to be upgraded. According to the research firm Canaccord Genuity, this maintenance will grow at a rate of about 10% a year. In fact, $111 of the 2021 Infrastructure Bill is earmarked for upgrading the United States water infrastructure. The demand for resources such as electricity and oil continues to grow. Investing in water stocks requires careful research and analysis.
- In addition, Invesco Global Water ETF Year-to-date return stands at -1.23% when the average in the industry is at around 20%.
- Of the five water investing options in this article, FLOWX deserves the most scrutiny before jumping in given its short track record.
- That number may seem unbelievable until you consider that every toilet flush uses 1.5 gallons of water.
- The water utility space is highly fragmented, and further privatization could lead to a roll-up play by larger companies, as well as free up access to the capital markets for infrastructure development.
That said, it’s not nearly as popular, at $330 million in assets, and it trades about 55,000 shares per day on average compared to 165,000 for PHO. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. The Coca-Cola Company stock opened the day at $52.74 after a previous close of $52.81. The Coca-Cola Company is listed on the NYSE, has a trailing 12-month revenue of around USD$44.1 billion and employs 82,500 staff. Evoqua Water Technologies stock opened the day at $32.40 after a previous close of $32.10. Evoqua Water Technologies is listed on the NYSE, has a trailing 12-month revenue of around USD$1.9 billion and employs 4,500 staff.
As of the end of 2022, the company’s regulated utilities had 263,265 water customers and 24,656 electric customers. Water may be a commodity that you don’t think about much when it comes out of the tap, but water is essential to life. Not only that, it’s a multibillion-dollar industry in the business world. There are currently numerous ways to add water exposure to your portfolio; most simply require a bit of research. Opportunities to invest in this scarce resource are flowing freely.
Set up recurring investments
The company is best known for cleaning and sanitation processes that help its hotel, school, laundry and restaurant customers reduce water usage when washing dishes and doing laundry. Advanced Drainage Systems is a pure-play water stock that gets most of its revenues (95%) from water-related activities, according to investment research firm Morningstar. “It’s my favorite water stock,” says Michael Halloran, an analyst at investment firm Baird. “They help put water back where it’s supposed to go safely.” Investors with time horizons of three years or more should fare well, he says.
Bolster the Defensive Part of a Portfolio
It also reported operating revenues of $53,852,000, an increase of $2,274,000 from 2019. And Valmont Industries’ leading pivot-irrigation system (which the company says holds a commanding 43% market share) fits the bill. The pivot sprinkler carefully delivers the right amount of water to crops when they need it, using roughly half the water than more frequently used flood-irrigation systems. Seventy percent of the world’s freshwater is used for agriculture. This statistic drives home why Valmont Industries (VMI) , a maker of farm irrigation equipment, is a water stock to watch.
Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month.
Compare trading platforms
This approach is a good option for those who have a large tolerance for risk and can afford to ride what is ufx forex broker out market fluctuations. WaterPik (PIK) is one example of a company that produces these products.
Investing in Water Indirectly
“The surcharges have been a source of steady revenue,” says Ruggeri, of Argus. Its price-earnings ratio of 23 is at the bottom of its long-term historical range of 23 to 40, according to Zacks. What’s more, Morningstar equities strategist Seth Goldstein expects that umarkets review Ecolab’s industrial water business will be the company’s largest source of incremental profit growth. The continued rise in costs for freshwater used by homeowners and commercial operations, which Goldstein expects to double in the U.S. by 2030, is also bullish.
Best Water Stocks to Buy
Water treatment involves the treatment of water and wastewater through its life cycle to remove harmful contaminants and the buildup of harmful deposits. The company has been a reliable dividend stock over the years and regularly increases its payout. It has a payout ratio of about 60%, meaning that it should be able to easily increase its dividend in the coming years. Middlesex’s revenue has grown slowly over the past six years, increasing from $132.9 million in 2016 to $162.4 million in 2022, or just about 3% annually.