Xylem Inc (XYL), American Water Works Company Inc (AWK), Siemens AG (ADR) (SI) – Water: Not a Drop to Drink, but Plenty of Money to Be Made

Page 1 of 2

Xylem IncWhether you know it or not, the world is facing a severe global water crisis.  Expanding demand for water has placed the natural resource under severe strain.  This high demand for water use is pulling a vacuum on the water industry, presenting an appealing long term investing opportunity.  In this article, I’ll outline the water crisis and three companies that are well-positioned to capitalize on this vacuum.

What’s the deal?

The global water crisis is best summarized in a series of quantitative facts, so here we go!  Of the global water supply, only 0.3% is available for human consumption.  With an exponentially increasing population, the demand for this finite amount of water is skyrocketing.  Water.org states that:

Women spend 200 million works hours daily to provide water for their families.

780 million people lack access to clean water.

3.4 million people die from a water related disease each year.

The water crisis strikes domestically as well.  Expanding industrial use in nuclear cooling, hydrofracking, and ever-increasing agricultural use is further increasing the water demand.  The American Society of Civil Engineers reports in the 2013 Report Card for America’s Infrastructure the following investments are necessary to repair American water infrastructure:

$21 billion for dam repair

$100 billion for levee repair

$15 billion in wastewater treatment system repair

$1 trillion in drinking water infrastructure repair

This rings in a total of $1.136 trillion required in U.S. government investment.

Now what?

The serious need for innovation in water conservation and supply and investment in water infrastructure has presented a long term profitable investing opportunity. The water industry is projected to increase from (2007) $522 billion to $961 billion by 2020.  This would place the water industry at a higher valuation than the global airline industry.  So, how can investors like you take advantage of this opportunity?

1. Xylem

Xylem Inc (NYSE:XYL) spun off from ITT Corp (NYSE:ITT) in 2011.  Xylem Inc (NYSE:XYL) offers a wide range of water products and  services including, but not limited to, the following:

Water quality logging and monitoring systems

Wastewater processing solutions

Large scale water transporting and handling systems

Desalination equipment

Xylem Inc (NYSE:XYL) is positioned to tackle the global water crisis through more than thirty individual markets, adding a safety net of diversification to an already appealing investment opportunity.

With 63% of revenue coming from international markets, and 20% of revenue coming from emerging markets, Xylem Inc (NYSE:XYL) has shown a commitment to addressing the crisis head on.  Xylem has a reasonable P/E of 19.45 and offers a 1.6% dividend yield.  Xylem Inc (NYSE:XYL) stock has traded flat for 2013, but it has just over $500 million in cash, and the shakedown from the spinoff is nearly complete, so future stock growth looks promising.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!