Sunday, September 19, 2010

Creating Water Out of Thin Air: Will It Hurt Water Stocks

The German organization, Fraunhofer Alliance SysWasser, has come up with a way of creating drinking water out of air, using sustainable water system technologies. The self-sufficient process utilizes solar collectors and photovoltaic cells, and works especially well in the desert.

So what will this new process do to the current water utilities? Probably not much, at least for now. American consumers prefer to get their drinking water through pipes, or better yet, out of bottles. So water utilities can still be considered a favorable investment.

Water stocks provide good income diversification along with a portfolio of electric utilities and natural gas utilities. Water utilities offer decent yields ranging from 2% to 5%. There are about a dozen water utility stocks with dividends, that were turned up by on their water stock list. Here are some examples.

American Water Works Co., Inc. (AWK) PE: 17 forward PE: 14.5 yield 3.9%

Consolidated Water Co. Ltd. (CWCO) PE: 31.5 yield 3.6%

SJW Corp. (SJW) PE: 27.6 yield 2.8%

To see a list of the rest of the top yielding water stocks, including a few that yield more than 4%, which you can download, add to, change, and sort, check out

Disclosure: Author does not own any of the above at the time this was written.


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