An Unfamous, Precious Commodity - Water

Water is something many people take for granted, seeming almost free and almost infinitely abundant. However, the fact is that water is one of the worlds most precious commodities, and does not receive the respect it deserves. A recent report has just revealed that water demand will increase nearly 50%in developed countries, and more than 50% in developing coutries, within the next 20 years.

So why is this commodity so precious & why should you be invested in it?

• Only 3% of all the water on earth is drinkable,
• Of the 97% that is not drinkable, in order to make it drinkable will dramatically increase the costs of water, and in turn increase the values of water utility stocks,
• At the current rate, world water supplies will be depleted in only a few thousand years,
• Nearly 1/4 of the world population still does not have access to clean, drinkable water, and another 1/4 has very high water scarcity stress,
• Our water needs will aways be there and growing, unlike natural resources for energy where we can change from one source to another, we will always need to drink water and use it in our food.

How can you take advantage of the ever growing long-term demand for water?

Buying water utilities is the best route to take for directly investing in water.Water utility stocks have on average outperformed the major market indices annualy, and cumulatively for the past several decades. Also, on an annualized basis, water utility stocks have been among the top performing domestic stocks for the past decade.

What water utilities to invest in now?

We have done some analysis and have decided upon the 2 water utility stocks we believe deserve your investment the most. They are: Consolidated Water Co. Ltd. (Nasdaq: CWCO) & Mueller Water Products Inc. (NYSE: MWA)

Both of these water utilities are very good long-term value buys at their current prices. CWCO has a very good net income growth trend, and is very efficient with much better than industry profit margins. CWCO also has extremely good liquidity, has recently been upgraded by analysts, and also is a small cap. stock which gives it tremendous room for future growth.

MWA has larger market capitalization and therefore, generally less risk, than CWCO so it may be an investment for a more conservative investor. However, MWA is in great position financially, particularly with their liquidity and debt management. Also, MWA is a great bargain at it's current price, and has technically broken above strong resistance levels which should give it an extra boost in the short to medium-term.