water shortage stocks
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Investing in Water Stocks: Three Names to Buy Right Now (SBS), (PNR), (PIO)
You've no doubt heard about the building scarcity of water. It's the reason savvy shareholders have been busy investing in water stocks.
Here's why.
Water may be everywhere but only 3% of it is fresh or suitable for drinking. Two-thirds of that is locked in glaciers and polar icecaps, which means less than 1% of the world's fresh water is available for human use.
That's the water found in lakes, rivers, reservoirs, and underground sources shallow enough to be accessed cheaply. Even still, much of that is polluted or otherwise unsuitable for consumption.
The water that's left is then used in agriculture and industry, and here's the kicker: It is divided between seven billion people... and demand is increasing all the time.
According to the United Nations, in the last century water use has increased at more than twice the rate of population growth.
Water has become so critical that Willem Buiter, chief economist at Citigroup, believes it will soon become "the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals."
That may be hard to imagine, considering we can simply turn on the tap and get fresh water for next to nothing.
But it's true. There are myriad of factors-from population growth to climate change-putting a strain on the world's water supply and causing demand to spike.
We'll look at those factors and how investors can benefit from this growing demand by investing in water stocks.
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7 Dividend-Paying Water Company Stocks Bound to Make a Splash
When it comes to commodities, attention typically focuses on gold and oil. But there's only one commodity that humans truly cannot live without - water.
Water covers nearly three-fourths of the Earth's surface, but 97.5% of that is undrinkable seawater, and 70% of what remains is frozen in glaciers.
Climate change, pollution and mismanagement of water resources have already created problems supplying the world's 7 billion people with fresh drinking water. None of those problems are going away, and all are likely to get worse - the earth's population, for example, is expected to reach 9 billion by 2025.
At least 80 countries already are suffering from water shortages, and the United Nations (UN) estimates that 67% of the world population will be "water-stressed" by 2025.
Even parts of the United States have increasingly suffered from droughts and water shortages, particularly in the West and sections of the South, like Texas.
"Water isn't just the oil of the 21st century; water is the raw material for life, for everything," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "I truly believe, as we see this all play out, that water could end up being even pricier than oil - on a per-liter basis."
Just as companies like ExxonMobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) have profited from a high-demand commodity like oil, so too will many of today's water companies profit as fresh water becomes increasingly scarce.
Still, no one is quite sure when water company stocks will start to take off, so the smartest way to play this industry is to look for companies that pay you to wait by offering up a healthy dividend.
Fortunately, since many companies in the water business are utilities, quite a few fit this definition.
Here are seven water company stocks that are in a position to profit from the "blue gold" and that will put cash in your pocket in the meantime:
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