Water Stocks: Will Top CEOs Start Taking Water Risk Seriously?

Water Stocks: Will Top CEOs Start Taking Water Risk Seriously?

Research  these Stocks on Kapitall’s Playground Now

 
research now

Companies that require water, either as an ingredient in a product like soda and beer, or as a way to grow crops like corn and coffee beans, they need to be hedging against future water shortages.

"Water is something that should be keeping CEOs up at night," says Brooke Barton, who runs water programs at Ceres, an environmental group in Boston.

Fresh water is a fixed commodity, and it faces a rapidly increasing demand from a growing middle class in emerging countries and increased scarcity from global climate change.

It's why Barton works with companies "to create an online checklist aimed at helping investors and companies assess efforts to manage water risk," reports Bloomberg.

"We're not talking about charity here," says Jonas Kron, who has led a shareholder challenge to J.M Smucker, which is as famous for its fruit jam as it is for its Folger's coffee. "These are investors seeking to have the company address the risks in its supply chain."

Krom tells Bloomberg that companies are increasingly realizing how water can affect their bottom line.

He notes that companies actively dealing with carbon emissions are generally outperforming their peers. "It will be real interesting to see if a similar relationship will be observed between water management performance and stock value. Come and talk to me in a year."

 

Business Section: Investing Ideas

The rising demand for this basic need is fueling an industry devoted to providing solutions, especially as it increasingly affects corporations and developed nations that tend to have a bit more money and motivation to kick things into gear.

So as long as water shortages continue to plague profit margins and wealthy regions, investors might want to consider the possibility of tracking utility stocks exposed to the trend.

Looking for ways to trade this trend? Here is a list of water utilities trading on U.S. markets. Use the links below to analyze further.

 

Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:

List sorted alphabetically.

 

1. Artesian Resources Corp. (ARTNA, Earnings, Analysts, Financials): Provides water, wastewater, and engineering services on the Delmarva Peninsula. Market cap of $161.66M. Relatively low correlation to the market (beta = 0.39), which may be appealing to risk averse investors. The stock has gained 5.97% over the last year.

 

2. American Water Works Company, Inc. (AWK, Earnings, Analysts, Financials): Provides water and wastewater services to residential, commercial, industrial, public, and other customers in the United States and Canada. Market cap of $5.69B. Relatively low correlation to the market (beta = 0.31), which may be appealing to risk averse investors. The stock has gained 8.42% over the last year.

 

3. American States Water Company (AWR, Earnings, Analysts, Financials): Provides water, electric, and contracted services in the United States. Market cap of $660.02M. Relatively low correlation to the market (beta = 0.34), which may be appealing to risk averse investors. The stock has gained 2.5% over the last year.

 

4. Connecticut Water Service Inc. (CTWS, Earnings, Analysts, Financials): Operates as a regulated water company in Connecticut. Market cap of $236.42M. Relatively low correlation to the market (beta = 0.46), which may be appealing to risk averse investors. The stock has gained 6.66% over the last year.

 

5. Consolidated Water Co. Ltd. (CWCO, Earnings, Analysts, Financials): Develops and operates seawater desalination plants and water distribution systems. Market cap of $129.44M. The stock has gained 2.07% over the last year.

 

6. California Water Service Group (CWT, Earnings, Analysts, Financials): Provides water utility and other related services in California, Washington, New Mexico, and Hawaii. Market cap of $759.03M. Relatively low correlation to the market (beta = 0.29), which may be appealing to risk averse investors. The stock has gained 2.66% over the last year.

 

7. Middlesex Water Co. (MSEX, Earnings, Analysts, Financials): Operates regulated water utility and wastewater systems in New Jersey, Delaware, and Pennsylvania. Market cap of $293.38M. Relatively low correlation to the market (beta = 0.48), which may be appealing to risk averse investors. The stock has gained 7.75% over the last year.

 

8. Pennichuck Corp. (PNNW, Earnings, Analysts, Financials): Engages in the collection, storage, treatment, and distribution of potable water for domestic, industrial, commercial, and fire protection service markets primarily in New Hampshire. Market cap of $135.59M. Relatively low correlation to the market (beta = 0.33), which may be appealing to risk averse investors. The stock has gained 2.81% over the last year.

 

9. SJW Corp. (SJW, Earnings, Analysts, Financials): Engages in the production, purchase, storage, purification, distribution, wholesale, and retail sale of water. Market cap of $433.15M. Relatively low correlation to the market (beta = 0.6), which may be appealing to risk averse investors. The stock has gained 2.37% over the last year.

 

10. Aqua America Inc. (WTR, Earnings, Analysts, Financials): Operates regulated utilities that provide water or wastewater services in the United States. Market cap of $2.99B. Relatively low correlation to the market (beta = 0.2), which may be appealing to risk averse investors. The stock has gained 2.32% over the last year.

 

 

(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Data sourced from Finviz.)

 

Use Kapitall's Tools: Looking for ways to analyze this list?

Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall's tab navigation to browse through the data…

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

ABOUT US

© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member. 

One Response to “Water Stocks: Will Top CEOs Start Taking Water Risk Seriously?”

  1. Jeff says:

    Great article! You missed The York Water Company (NASDAQ:YORW). Its 196 years old and has the longest dividend record in America..

Leave a Reply

Protected by WP Anti Spam