Make money from water

No one pays attention to water. It seems abundant and it is cheap. People get water for granted. When people talk about commodities, they are referring to gold and oil. Rarely anyone is serious about water as a commodity. I think this will change in a big way, probably not obviously at first but will be more and more so eventually.

Yes, water covers nearly 3/4 of the Earth’s surface, but over 97% it is seawater which is undrinkable. Actually the world is becoming more and more short of fresh drinkable water for the world’s 7 billion people. The shortage of fresh water becomes more severe when taking into consideration climate change, pollution and mismanagement of water resources. I won’t be surprised that in 5 years or so, people will talk about water like what they are talking about gold and oil today. After all, it is one commodity that human beings cannot live without. We are actually facing a very dire situation with respect to the clean water resources. 

I think it is the time to start to build up the water portfolio, slowly but surely. I bought American States Water (AWR) about 5 years ago, a company that serves approximately 15 million people with drinking water, waste-water, and other water-related services in approximately 30 states and 2 Canadian provinces. While it is certainly not a super star in terms of its performance, it is very stable with an upward trend. It has been certainly doing much better than the general performance of S&P (see below the comparison). More beautifully, it is paying a respectful dividend, over 3% at of now. So you are getting paid for waiting for other people to wake up about water companies. Of course, there are more such water utility companies, which are also paying very good dividends, such as Aqua America (WTR) and American States Water (AWR). Do your home work and act accordingly. I think you will not regret over time.