Top Five Water Stocks to Watch for Investment Opportunities

On November 29, 2023, MarketBeat’s stock screener tool highlighted five water-related stocks that investors should consider: Coca-Cola, NuScale Power, Xylem, Ecolab, and IDEXX Laboratories. These companies represent a diverse range of activities within the water sector, including supply, treatment, and management, making them appealing choices for long-term investors.

Water stocks are shares in companies focused on various aspects of the water industry, such as municipal water utilities, wastewater treatment providers, and water technology firms. Investors often view these stocks as a defensive strategy, particularly given global trends like population growth, urbanization, and increasing water scarcity. Despite their defensive nature, these stocks are not without risks, including regulatory hurdles, capital expenditures, and fluctuations in regional demand.

Coca-Cola: A Beverage Giant with Water at Its Core

Coca-Cola (KO) is primarily known for its extensive range of non-alcoholic beverages, which include sparkling soft drinks, juices, and water products. The company also produces beverage concentrates and fountain syrups, catering to restaurants and convenience stores globally. With its significant reliance on water as a key ingredient, Coca-Cola’s operations are closely tied to water supply and management strategies.

NuScale Power: Pioneering Nuclear Solutions for Water Needs

NuScale Power (SMR) is making strides in the energy sector with its development of modular light water reactor systems. These reactors are designed to supply energy for various applications, including electrical generation, district heating, and desalination. The company offers the NuScale Power Module (NPM), capable of generating 77 megawatts of electricity, making it a potentially critical player in the intersection of energy and water sustainability.

Xylem: Engineering Solutions for Water Infrastructure

Xylem (XYL) focuses on providing engineered products and solutions across the water sector. The company operates through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services. Its Water Infrastructure segment supplies a range of products, including pumps for water, storm water, and wastewater, indicating its comprehensive role in water management.

Ecolab: Global Leader in Water Treatment

Ecolab (ECL) specializes in water, hygiene, and infection prevention solutions worldwide. The company has three segments: Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences. Ecolab’s Global Industrial segment provides essential water treatment solutions across various industries, emphasizing the critical role of effective water management in industrial processes.

IDEXX Laboratories: Innovating Water Quality Testing

IDEXX Laboratories (IDXX) develops products for various markets, including veterinary, livestock, and water testing. The company’s focus on water quality products positions it as a key player in ensuring safe water supplies. With operations extending across continents, IDEXX’s commitment to water safety supports its relevance in global health and environmental sustainability.

As investors consider these water stocks, it is essential to recognize the broader implications of water management and sustainability. With increasing global attention on resource conservation, the companies highlighted offer avenues for investment that align with both financial and environmental goals.