Water Stocks in 2024 from all Countries and Sectors - PrudentWater

Water Stocks

Water stocks in 2024 as profitable long term investments. We list water stocks from around the world, covering the following sectors: water supply, wastewater treatment, water technology, water infrastructure, seawater desalination, sanitation, water technic, irrigation technology, home soda maker and water entitlements. Water stocks from all countries are taken into account once the respective company is listed on a stock exchange. The profile of each water stock contains comprehensive information about the respective company.

Water Stocks
There are approximately 50,000 water utilities and 15,000 wastewater operators in the United States. However, most of these are very small and operate at or near loss. Therefore, consolidation is inevitable for the fragmented water industry and at the same time offers great growth potential for the listed water utilities. Overall, the water market in the U.S. is highly diverse, complex and decentralized. There are many different players in the market, including municipal and private water providers. Regulation of the water market varies from state to state. Some states have enacted strict laws and regulations to regulate water supply and consumption. However, in other states, there is less regulation and the water market is more supply and demand driven.

The water market in China is controlled and regulated by the government and is shaped by population growth, urbanization, pollution, climate change and by political decisions. The availability of water in China is limited and unevenly distributed compared to developed countries, with the north of the country often affected by water shortages. To meet water needs, the Chinese government has taken various measures in recent years, including building dams and canals to divert water from the south to the north. Incentives for more efficient water use have also been put in place, such as the introduction of water pricing reforms and the promotion of water conservation technologies. However, water pollution remains a serious problem in China, especially in rivers and lakes, which are often used as sewage dumps. The government has taken several measures to combat water pollution, including imposing stricter environmental regulations on businesses and encouraging investment in water treatment plants. The water market in China is characterized by ever-increasing demand in urban centers due to population growth, urbanization, and economic development. However, the lack of water as an economic growth constraint has already been perceived by the government, so efforts are being made to ensure access to water and increase efficiency in water use.

Investments in British water utilities should always be accompanied by closer monitoring of political developments in London. The left-wing Labour Party wants to nationalize the British water utilities again. The Tories (Conservative Party) privatized the water utilities in 1989 under Margaret Thatcher and want to maintain this privatization because “nationalizing the water industry in England would be bad for customers, bad for the environment and bad for the economy.” In the coming years, however, U.K. water utilities do not face regulatory headwinds from Ofwat. The UK water market is regulated by Ofwat which sets prices, quality standards and performance targets that water suppliers must meet.

The water market in Germany is characterized by a high level of regulation and control by the state. The supply of drinking water and wastewater disposal as well as the price setting are generally the responsibility of local authorities, which are also responsible for monitoring the quality of the water. However, there are also private providers offering drinking water or wastewater services. In the area of drinking water, there is high quality and wide availability in Germany. However, the price of drinking water has been rising in recent years due to the cost of purification, treatment and transport. The situation is similar in the area of wastewater disposal. The cost of wastewater treatment and disposal is rising, in particular due to increasing requirements for the purification quality of wastewater and the protection of the environment. Overall, the water market in Germany is stable, but there are also challenges, particularly with regard to the cost and sustainability of water supply.

Equity investments in Brazilian water utilities are currently associated with two main risks: Political instability in Brazil and the weakening Brazilian currency. The Brazilian government has a stake in the water utilities via the individual states, which means that a politically intended intervention is possible at any time. The depreciating Brazilian real weakens the financial stability of the water utilities due to foreign currency debts. However, the Brazilian water market has great potential in the long term. According to the Financial Times, half the population lacks adequate sanitation, 35 million people do not have clean drinking water in their homes, and 100 million people do not have access to sewage systems..

The Greek water market is part of the liberalized energy market in Europe and has certainly changed in recent years. The government has taken steps to privatize and modernize the sector to meet the demand for clean water and enable more efficient use of resources. In doing so, the government is committed to sustainable water management and is promoting the use of technologies such as seawater desalination and water recycling to ensure water supply. However, this is currently still happening too slowly due to financial constraints. This is because there are still major challenges in managing the limited resource in Greece, especially in rural areas. In summary, the Greek water market is characterized by a combination of liberalization, modernization and opening competition.

The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries. The Index began on July 27, 2011 at a base value of 1000.00. See NASDAQ OMX Global Water - Comparison to S&P 500.

Why you should consider Water Stocks as part of your long term Investment Strategy – and what are the Risks?

The demand for water is very stable in the long term and is even gradually increasing due to population growth, climate change and changing lifestyles. As an investment, water is therefore much less affected by economic trends than other promising ecological investment themes such as wind or solar energy and hydrogen technology. Water stocks are also characterized by comparatively low volatility in price development, relatively stable and reliable dividend payments, and an often solid underlying business model. In addition, water stocks fulfill the now widespread ESG criteria (Environment, Social, Governance) and are therefore considered by investment funds, pension funds and generally by investors who invest or are allowed to invest exclusively on the basis of these sustainability criteria.

However, water utilities are always exposed to regulatory and political risks, as their business activities and pricing are regulated and controlled by the respective authorities. Similarly, demands for the nationalization of water utilities regularly arise from the political arena. As a result, annual growth rates in terms of sales and profits are limited, especially for water utilities; on the other hand, this makes revenues more predictable. However, shares in water utilities are also interest rate-sensitive shares at the same time. This means that their attractiveness decreases as soon as interest rates on the market rise, as they then appear less attractive compared to safe fixed-income bonds with similar or higher yields. Currently in 2024, water stocks are on average highly valued in some cases due to the promising future prospects. This reduces the price potential in the short to medium term.

Water is by no means the only attractive and promising investment topic that investors with a medium to long-term horizon should consider – as things stand today, however, water stocks should be included in your long-term investing strategy. The reasons for investing in water through the stock exchange are wide-ranging, well-founded and reasonably predictable.. The sole argument in favor of water stocks is the fact that the demand for water and wastewater services shows continuous stability. Most importantly, demand for water is relatively independent of economic conditions and business cycles. Water stocks offer the potential for long-term capital appreciation and stable dividend payments – the two cornerstones of an equity investment.