Five Plays on Water

08/10/2017 2:50 am EST

Focus: INDUSTRIALS

Tony Daltorio

Editor, Investors Alley Premium Digest

With demand for clean water expected to surge by over 85% by 2035, you’re looking at a phenomenal investing opportunity. Here are five stocks that are critical to making sure you have clean drinking water. notes Tony Daltorio, editor of Investing Daily's Growth Stock Advisor.


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There a number ways to approach the global water problem and therefore a lot of investable companies in the sector. One approach is the improvement of water quality. There is an estimated two million metric tons of human waste sent into water sources daily, according to the World Water Assessment Program.

That is a vast opportunity for a company like the technology conglomerate Danaher (DHR), which is involved in water testing and water purification.

Then there is the infrastructure. A report from the World Bank said, “Some cities. . .lose more water through leaking pipes than they deliver to households.”

That is music to the ears of Mueller Water Products (MWA). The company offers a number of products related to water piping and infrastructure. Its water leak detection business, Echologics, provides actionable data for water utilities on underground water pipe leaks.

A company very well-positioned is the water technology firm Xylem (XYL), which was spun off from ITT Corporation in 2011. Its five “growth centers” — transport, treatment, dewatering, analytics and applied water systems — cover every stage of the water cycle.

Emerging markets – where much of the water stress lies – make up over 20% of its business. It is involved in the world’s largest water reclamation and reuse installation, located in Kuwait.

And in Shanghai, a water treatment plant is disinfecting the water using ultra-violet light technology from the company’s Wedeco unit. A similar system has also been installed in New York and Chicago.

Xylem also provides membrane-based desalination technology and components and has done so since 1975. And for about 25 years, the company has provided pre-treatment systems to improve the performance of reverse-osmosis membranes.

Another two diversified companies worth a look are Pentair PLC (PNR) and Roper Technologies (ROP). Pentair is involved in water pumps and systems, advanced water filtration and desalination, and flood water and wastewater systems. Roper has divisions in fluid handling and data collection/metering technology.

Famed international and commodities investor Jim Rogers said in an interview with marketing agency Sinclair & Co., “Water is the single most important determination of civilization.” He’s right. History shows that without water, no civilization–no matter how advanced–can survive for long.

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