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Salt Island Mono Lake |
Availability of water is a major concern for all the states in the southwest, after going through a major drought. But it is not just a problem in the US; water scarcity is a problem for many 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. It is the process of filtering out salt and other mineral from salt water so that it can be used for human consumption.
Some major companies, such as Siemens (SI) and General Electric (GE) have water desalination divisions that are only a small part of their businesses, but there are other companies which are more of a desalination pure play.
According to our list of water purification and desalination stocks here, there are over a dozen companies involved in the treatment of water, and several of them have specifically targeted desalination.
Consolidated Water Co. Ltd (CWCO) is one of the purer 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 24 times trailing earnings and 19 times forward earnings. The company pays a decent yield of 2.4%. It has been paying quarterly dividends since 1996.
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 17, and sports a yield of 0.9%. The company has increased its dividend every year during the last three years.
To see an Excel list of all the stocks involved in desalination and purification, which can be downloaded, sorted, and updated, go
here.
Disclosure: Author did not own any of the above at the time the article was written.
By Stockerblog.com