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

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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!