Water Stocks - iO Charts

WATER STOCKS

Having access to clean water is one of the most important needs of human beings, so companies that are involved in providing this resource will always have demand for their services.
Increasingly more water is consumed every year as it is shown on the graphs below.
Companies in this space generally do not have very rich valuations, as most of them are older, more established players. With some exceptions, most water stocks are suitable for risk-averse investors as they usually have stable, slowly growing revenues and earnings, while not being at risk of disruption.
Consumption is usually divided into three categories:
  • Agricultural - Water used for irrigation, drinking water for livestock.
  • Domestic - Water usage by households for drinking, cleaning, cooking, etc.
  • Industrial - Hydro power and water used for industrial processes in factories.
One thing that surely needs to improve is the amount of water that goes to waste. As shown on the charts, in some cases we waste 4 or 5 times more water than what we consume.
There is also a huge loss incurred with the evaporation of water from reservoirs, which exceeds our total domestic and industrial consumption.
The main goal of companies that operate in this sector is to provide clean water while losing as little amount of water as possible in the process. We divided these organizations into 4 distinct categories with possible overlaps existing among them:
  • Water treatment - Water needs to be cleaned to make sure it is safe for human consumption as well as for the environment when it is released back into lakes and rivers. Organizations that operate in this space manufacture water treatment equipment that they either use themselves or sell to other organizations that operate water treatment plants.
  • Utilities - Utilities operate the water transport infrastructure like water pipes, water towers, public taps and make sure that we have water flowing out of the tap in our house.
  • Efficient water transport and infrastructure - These companies focus their effort on creating solutions that minimize water loss and energy usage and maximize efficiency throughout the whole system.
  • Irrigation - Agricultural water usage makes up a huge portion of our overall water usage, so efficient irrigation techniques are vital. This mainly includes irrigation pipes, machines and farm infrastructure.
Water ETFs
TickerName
PIOInvesco Global Water ETF
PHOInvesco Water Resources ETF
CGWInvesco S&P Global Water Index ETF
FIWFirst Trust Water ETF
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