September 30, 6: Water is the source of life.
Many futurists believe it is the largest concern of the world in the years ahead. The water sector is also not the easiest to invest in. Many of the pure-play companies have been acquired and many of the key aspects of water are dominated by subsidiaries of global conglomerates. GE and 3M Co. MMM are key examples of acquiring companies which have a bright future in various aspects water desalination and filtration, but these companies are fat too diversified to be true water investments.
Making a blanket investment in water has so far been a difficult trend. The sector has given large rewards in some cases, and been very painful in other cases.
We are reviewing American Water Works Company, Inc. AWK , Badger Meter, Inc. BMI , Tetra Tech Inc. WTS and Veolia Environnement S. For more diversified picks via ETFs, there are also the PowerShares Water Resources NYSE: PHO and the PowerShares Global Water NYSE: Lastly there are two BRIC stocks that will require a judgment of your own, but those are Duoyuan Global Water Inc.
DGW and Companhia de Saneamento Basico do Estado de Sao Paulo NYSE: SBS as the international emerging wild cards. There are some key risks ahead in water that make investing in water not as sound as investing in other futurist asset classes. That business is gone for now, and many feel that it may be years before that business comes back in any meaningful way. Another huge risk is that water is unfortunately not immune to the economy, even if you die after a few days without water.
Local, state, and even national governments around the world have to be able to pay for water investments via taxes, and we know how budgets are under pressure on all angles top to bottom. Another risk is protection and seizure, where local government may declare that water is a public asset and we have already seen many local and regional instances where the exporting or transporting of water away has been blocked.
You have also likely heard where local communities are trying to prevent water companies from taking the local water and selling it elsewhere. Another consideration is that there is a movement against bottled water today despite the notion that local tap water is often contaminated, tastes bad, and is believed to contain trace elements of pharmaceutical products. American Water Works Company, Inc.
AWK is our single best pure-play in water for the U. This was one of our top defensive stock picks and it recently bumped up its dividend.
American Water is the largest public water and waste water utility in the U. An implied dividend yield now of 3. This one offers water investors, defensive investors, and income investors the same outcome.
No bottled water here; think tap water, showers, sprinkler water, toilet water, and water for industries. Investors hate paying at the week highs, so any sizable pullback here should be used as a buying opportunity.
What the Rise of Bottled Water Means for Your Investments in Coca-Cola and PepsiCo -- The Motley Fool
Investing , Analyst Upgrades , Conglomerate , Dividends and Buybacks , food , International Markets , Research , utilities , Value Investing , Water , American Water Works Co.
AWK , General Electric Company NYSE: GE , 3M NYSE: MMM , Companhia de Saneamento Basico SBS , Tetra Tech, Inc.
Bling H2o - Bottled Water, Beverages, Non Alcoholic Drinks
TTEK , Veolia Environnement ADR NYSE: VE , Watts Water Technologies, Inc. Free Daily Newsletter Subscribe.
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