These stocks could see over a trillion dollars pour into their coffers over the next ten years as the United States starts spending on critical infrastructure repairs. Buy and hold these stocks as America invests in infrastructure.
In a previous article, Investors Alley introduced readers to a problem that will not fade away any timeoon – the availability of water that is safe for use and other related issues such as sanitation.
The news in this sector just keeps coming, and it does not make for pleasant reading.
Earlier this month, the World Health Organization (WHO) came out with a startling report.
The WHO Director, Dr. Maria Neira, was very blunt about the findings: “Today, almost two billion people use a source of drinking water contaminated with feces, putting them at risk of cholera, dysentery, typhoid and polio.”
She went on, “Contaminated drinking is estimated to cause more than 500,000 diarrheal deaths each year and is a major factor in several neglected tropical diseases including intestinal worms, schistosomiasis (parasitic worms that can attack organs) and trachoma (bacterial infection of the eye).
An Example That Hits Home
Here is just one example. . .
Residents can’t afford wastewater sanitation facilities, so they just let the sewage flow freely into their backyards from their mobile homes. Human waste lies uncovered in soil, with children playing nearby.
The country in question here? Sadly, it is the United States.
These conditions do exist in very rural sections of five southern Gulf states like Alabama, affecting more than 12 million Americans.
One example is occurring in Lowndes County, Alabama, where some people are infected with helminths. These are intestinal worms such as hookworm.
Other tropical diseases can be found in this afflicted Gulf Coast region of the U.S. One of these is the infectious disease called chigas, which is spread by triatomine beetles (also known as “kissing bugs”).
This disease mimics many of the symptoms of coronary heart diseases, so it often goes undiagnosed.
More Money Needed
As with many problems, more money is needed to help solve it.
Money needs to be spent on the health side to help properly diagnose people and treat them.
But that is sort of like closing the barn door after all the horses have bolted.
What is really needed is a big boost in infrastructure spending to eliminate the conditions that are causing these diseases.
Globally, the problem is massive. The World Bank says infrastructure spending needs to triple to $114 billion annually. And that is not counting the operating and maintenance costs.
Back here at home, the 2017 report card from the American Society of Civil Engineers (ASCE) gave our wastewater infrastructure a grade of D+ and our drinking water infrastructure a grade of D.
These are not grades you would be happy with if your child received these in school.
Add in the fact that the U.S. Office Director of National Intelligence now ranks water scarcity as a major threat to national security alongside terrorism.
The ASCE estimates our country needs $105 billion in wastewater funding now. The EPA says $271 billion will be needed over the next 25 years on wastewater spending.
On the drinking water side, the American Water Works Association believes upgrades to our country’s creaking water infrastructure may require an astonishing one trillion dollars!
Overall, the ASCE says there is a more than $2 trillion funding gap between the projected current funding and the $4.59 trillion needed to get U.S. infrastructure up to an overall B grade by 2025.
Even if all of these figures are off by a small margin, the message is clear. . .
The United States needs to begin upgrading its infrastructure now!
Trump Infrastructure Stocks
The good news is that President Trump is proposing to spend about a trillion dollars on infrastructure.
But much of that funding is expected to come from private industry in the form of public-private partnerships. We probably will not get the details of Trump’s plan until the fall.
But investors shouldn’t wait until then. It’s time now to look for infrastructure stocks that will benefit from increased spending in the sector.
There are quite a number of companies involved, even just in the water infrastructure sector.
One such company IPO’d in October – Forterra (Nasdaq: FRTA).
It is a leading manufacturer of pipe and precast products in the United States. Its products are used for a variety of water-related infrastructure applications including water transmission, distribution, and drainage.
Another similar company is Northwest Pipe Company (Nasdaq: NWPX).
It’s the largest manufacturer of engineered steel pipes for drinking water systems in North America.
For those readers looking for a broader global play on water, there are four water-related ETFs: First Trust ISE Water Index Fund (NYSE: FIW), Claymore S&P Global Water Index (NYSE: CGW), Powershares Water Resource Portfolio (Nasdaq: PHO) and Powershares Global Water Portfolio (Nasdaq: PIO).
This whole sector is a very interesting and I believe a profitable one to invest in. I will be discussing further opportunities in a future issue of Growth Stock Advisor.