Saturday, November 27, 2010

Water Desalination Stocks

As a resident of California, I am very aware of the issues and political football called water rights. Access to water is a topic of concern for all the states in the southwest. But it is not just a United States issue, water scarcity is a problem for countries around the world, especially in the Middle East. Water desalination, also referred to as desalinization and desalinisation, could be one of the leading industries in the next decade. Some major companies, such as Siemens (SI) and General Electric (GE) have water desalination divisions that make up a small part of their businesses, but there are other companies which are more of a pure play in the industry.

According to the list of water purification and desalination stocks at, there are over twenty companies involved in the treatment of water, and several of them have specifically targeted desalination.

Consolidated Water Co. Ltd (CWCO) is one of the purest plays in the sector. It operates seawater desalination plants and other water services in the Cayman Islands, the Bahamas, Belize, the British Virgin Islands, and Bermuda, using reverse osmosis technology to convert seawater to drinkable water. The stock trades at 17 times forward earnings and provides a nice yield of 3.2%. The company has raised its dividend in eight of the last ten years.

Tetra Tech (TTEK) designs and builds desalination systems that use seawater, brackish water, and reclaimed wastewater sources to help increase water supply, and has been designing desalination plants in Florida since the 1990s. It also designed the first California desalination plant, the Corona Temescal Desalter. The stock has a forward price to earnings ratio of 15.

To see an Excel list of all the stocks involved in desalination and purification, which can be downloaded, sorted, and updated, go to

Disclosure: Author did not own any of the above at the time the article was written.


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