Xylem Inc (XYL), American Water Works Company Inc (AWK), Siemens AG (ADR) (SI) – Water: Not a Drop to Drink, but Plenty of Money to Be Made

2. American Water Works

American Water Works Company Inc (NYSE:AWK) is a public utility company operating in the United States and Canada.  American Water Works serves approximately 14 million people across 30 U.S. states.  The company currently holds 15 state subsidiaries, and is steadily expanding through further acquisitions.

Trading at its 52 week high, American Water Works Company Inc (NYSE:AWK) has put together 7.9% year-on-year revenue growth and 15.7% YOY EPS growth.  America Water Works is also sporting a nice 2.6% dividend yield.  While American Water Works Company Inc (NYSE:AWK) is carrying a fair bit of short and long term debt, much of this is attributed to the recent growth-through-acquisition strategy. American Water Works Company Inc (NYSE:AWK) is a safe long term bet for income investors, but keep an eye on the debt!

3. Siemens AG

Siemens AG (ADR) (NYSE:SI) offers a similar set of services as Xylem, but packaged within a blue chip company that is well-diversified across a number of other industries, including automation, energy, and healthcare.  Siemens AG (ADR) (NYSE:SI) Water spans across the life sciences industry, power industry, drinking water treatment industry, and many more.

This German giant has a $92.8 billion market cap, and a solid 2.7% dividend yield. Siemens AG (ADR) (NYSE:SI) is carrying over $14 billion in cash and healthy amount of debt.  Siemens has a mean analyst consensus rating of outperform.  As the video below shows, Siemens AG (ADR) (NYSE:SI) has a strong focus on water innovation, making the company a strong long-term buy.

Conclusion

With exponential population growth and increased industrial and agricultural water use, the strain on the natural water resources has become very severe.  The water industry is expected to grow in size from $522 billion to $961 billion by 2020.  Water innovation is a top priority for a range of social and industrial reasons. While the water crisis is severe, it presents an excellent opportunity for businesses, and subsequently, investors.  Xylem Inc (NYSE:XYL), American Water Works Company Inc (NYSE:AWK), and Siemens AG (ADR) (NYSE:SI) are all appealing long-term plays in the water space.

The article Water: Not a Drop to Drink, but Plenty of Money to Be Made originally appeared on Fool.com and is written by Robinson Greig.

Robinson Greig has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robinson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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