This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

10 Stocks That Won't Leave You High and Dry

BOSTON ( TheStreet) -- Most of us don't give our water supply much thought. But "free," or at least endless, supplies of relatively cheap water are evaporating, and the enormity of the problem is growing because of rapid climate change and the threat of global warming.

So water price shocks for companies and consumers aren't far off. That will prompt new ways of managing the resource, which is why the long-term prospects for water-industry companies' stocks, ranging from utilities to manufacturers of pipes, chemicals and computerized controllers are so compelling.

"Much of the U.S. water infrastructure dates back to the Great Depression, and the Environmental Protection Agency estimated in 2007 that it would require about $335 billion to upgrade and repair just community and not-for-profit water systems," writes a Morningstar analyst. "With municipalities struggling to finance basic repairs and federal funding unable to bridge the gap, the signs point to massive opportunities for investor-owned businesses."

Not to mention the international demand for modern drinking- and waste-water infrastructure design, construction and maintenance.

The S&P Global Water Index, made up of 50 stocks, has risen 9.8% this year, versus the S&P 500's 9.4% gain. The water index is up 67% over the past three years, more than three times that of the S&P 500.

Indicative of the size of the need for spending, industry trade group the American Water Works Association estimated in a recent research report that fixing and expanding underground drinking water systems in the U.S. will cost over $1 trillion in the next 25 years.

In the near term, it's expected that big infrastructure spending will be fitful as already cash-strapped local governments face opposition to tax increases. But S&P says it expects water utilities will get "adequate rate hikes to cover rising infrastructure costs for aging water systems."

Inevitably, though, an increasing number of communities will choose to sell their municipal water supply utility to private, professional managers or establish public-private operating partnerships.

That creates opportunities for companies such as American Water Works (AWK - Get Report), already the nation's largest private water utility, and water-management specialists such as Xylem (XYL - Get Report), which has products that cover the gamut of water industry needs, from transportation to purification.

Here are 10 stocks representative of various aspects of the water industry that are expected to benefit from the changes ahead, arranged in inverse order of market capitalization:

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CCC $20.92 -0.14%
AWK $54.41 0.18%
ITRI $36.38 -0.63%
XYL $34.98 -1.00%
WTS $54.58 -0.26%

Markets

DOW 17,894.27 -82.04 -0.46%
S&P 500 2,078.27 -7.97 -0.38%
NASDAQ 4,928.0590 -19.3820 -0.39%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs