With money already being allocated to combat global warming's affect on water supply, investors cannot afford to sit on the sidelines and wait for politicians to settle the matter, an analyst said Tuesday.
Dwindling snowfalls and snowpacks, changes in precipitation patterns, rising sea levels and increased droughts are all consequences of climate change, Boenning & Scattergood analyst Ryan M. Conners said in a note to clients.
"Water systems are already acting to shore up their infrastructure to cope with these changes, creating near-term opportunities," said Conners,
Conners said he normally avoids "politically charged" topics in his research, but the water industry's current actions have created an investment opportunity.
In the water storage sector, Northwest Pipe Co. and Ameron International Corp. hold more than 50 percent of the market share for a large type of water pipeline in the Western United States, an arid region "that could become even more water-stressed as climate change plays out," he said.
Shares of Northwest fell 3 cents to $40.24 during intraday Tuesday trading, and shares of Ameron added $1.42 to $89.94.
Lindsay Corp. will likely see growth as its water-efficient irrigation systems grow more popular, Conner said.
The stock rose $1.19 to $108.94.
Companies that make water conservation equipment _ such as meters _ stand to benefit as prices rise, he said. Currently water is the least expensive utility, but as it becomes more expensive rise the average consumer will likely monitor usage more, he said.
Shares of Badger Meter Inc. rose 27 cents to $42.29 and Watts Water Technologies Inc. fell 4 cents to $28.99.
Companies looking to the world's largest water reserve _ the ocean _ may likely be good long-term investments, Conners said. Shares of Consolidated Water Co. Ltd., which desalinates water in the Caribbean Sea, rose 57 cents, or 2.5 percent, to $23.74.
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