Desalination stocks are going to start becoming household names. With the fear of water shortages and water insecurity looming, companies are taking action. But before we get into the best desalination stocks to buy, we've got some details to cover.
First, what even IS desalination and why is it such a growing industry?
Desalination is the process of removing salt from seawater or brackish water to produce fresh water. It is a way to create a water supply from seawater, which is abundant but salty. Desalination serves multiple purposes, including the provision of drinking water, industrial water, and water for irrigation. It caters to the diverse needs of various sectors by supplying purified water for consumption, industrial processes, and agricultural irrigation.
The first desalination plant was built in 1952 in Florida. Today, there are over 15,000 desalination plants in operation around the world. The United Arab Emirates is the world's largest user of desalination, with over 90% of its drinking water coming from desalination plants.
The cost of desalination has declined by over 50% in the past 20 years. But while the cost is declining, the industry is thriving. The desalination industry is growing, and experts expect it to continue growing in the coming years. Join Wealth Daily today for FREE. We’ll keep you on top of all the hottest investment ideas before they hit Wall Street. Become a member today, and get our latest free report: “Why You Need to Fire Your Money Manager.”
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So why is desalination so important?
It should go without saying that water is one of the most critical resources on the planet. When we experience water shortages, the suffering is imense. The shortages might not be slowing down anytime soon, either.
The global demand for water is growing. Experts expect the world's population to reach 9.7 billion by 2050, and this growth will strain the world's water resources. Desalination is one way to meet the growing demand for water, and it is becoming increasingly popular in many parts of the world.
But desalination isn’t cheap to start. Considering this, a company that achieves success in the desalination industry has the potential to become an exceptionally valuable stock in the sector.
Why? It’s a capital-intensive industry. The cost of building a desalination plant can be high, but the cost of operating a desalination plant is relatively low. This makes desalination a good investment for long-term water security.
Technology Used by Desalination Stocks & Companies
There are two primary types of desalination technologies: thermal and membrane. Thermal desalination uses heat to evaporate seawater, and the condensed water vapor produces fresh water. In simple terms, it involves boiling the water to purify it. Membrane desalination uses pressure to force water molecules through a semi-permeable membrane, leaving the salt behind.
Desalination is a relatively energy-intensive process, but as mentioned earlier, the cost of desalination has been declining in recent years. Desalination is now a viable option for many countries that are facing water shortages.
The list of countries (and states) facing water shortages isn’t as short as you would think, either.
Places in Need of Desalination Technology
There are many real-world examples of desalination helping. For example, in Saudi Arabia, desalination provides about half of the country's drinking water. This has helped to ensure that Saudi Arabia has a reliable water supply, even in the face of a growing population and climate change.
Another example is the United Arab Emirates. About 90% of the UAE's drinking water comes from desalination plants. This has helped to make the UAE one of the most water-secure countries in the world.
Israel is another country that is facing severe water scarcity. Desalination has helped to alleviate the water shortage, and it now provides about 55% of Israel's drinking water. Desalination has been a key part of Israel's water security strategy.
California is a state that is facing a growing water crisis. Although desalination is not currently a major source of water in California, officials are considering it as a means to supplement the state's water supply. Desalination could help to ensure that California has a reliable water supply in the future.
Florida, like California, grapples with water scarcity issues. Desalination already plays a major role as a water source in Florida, and its significance is projected to rise further in response to increasing water demands in the future. Desalination is helping to ensure that Florida has a reliable water supply for its growing population.
These are just a few examples of how desalination is helping to address water scarcity around the world. As water scarcity becomes more of a problem, desalination is likely to become even more important.
10 Desalination Stocks to Watch
- American Water Works (AWK)
- Consolidated Water (CWCO)
- Ecolab (ECL)
- General Electric (GE)
- Veolia Environnement (VEOEY)
- Suez Environnement (SZEVF)
- Acciona (ACXIF)
- Energy Recovery (ERII)
- California Water Service (CWT)
- Edison International (EIX)
American Water Works (AWK) is a water utility company that provides water and wastewater services to over 15 million people in the United States. AWK operates a total of 15 desalination plants across California, Florida, and Texas. With a commendable track record of delivering dependable water services, the company is in a favorable position to leverage the growing demand for desalination and seize opportunities in the market.
Consolidated Water (CWCO) is a water utility company that provides water and wastewater services to over 200,000 people in the Caribbean and the Bahamas. It operates 11 desalination plants in the Bahamas, the Cayman Islands, and the Turks and Caicos Islands. CWCO is a leader in the desalination industry, and it has a strong track record of success.
Ecolab (ECL) is a water treatment company that provides water treatment services to commercial and industrial customers. ECL manufactures a variety of desalination equipment, including reverse osmosis membranes and energy recovery devices. A prominent player in the water treatment industry, ECL holds a global leadership position and is strongly positioned to capitalize on the expanding demand for desalination.
General Electric (GE) is a multinational conglomerate that provides a variety of products and services, including desalination equipment. GE manufactures reverse osmosis membranes, desalination plants, and water treatment systems. GE is a global leader in the water treatment industry, and it has a strong track record of innovation. This is one of the more popular desalination stocks.
Veolia Environnement (VEOEY) is a French multinational water company that provides water and wastewater services to over 100 million people in over 70 countries. The company operates over 500 desalination plants around the world. Veolia is a leader in the desalination industry, and it has a strong commitment to sustainability. This is another very popular desalination stock.
Suez Environnement (SZEVF) is a French multinational water company that provides water and wastewater services to over 100 million people in over 70 countries. The company operates over 400 desalination plants around the world. Suez is a leader in the desalination industry, and it has a strong commitment to innovation.
Acciona (ACXIF) is a Spanish multinational infrastructure company that provides a variety of services, including desalination. Acciona operates over 100 desalination plants around the world. Acciona is a leader in the desalination industry, and it has a strong commitment to social responsibility.
Energy Recovery (ERII) is an American company that manufactures energy recovery devices for desalination plants. The company's products help to reduce the energy consumption of desalination plants, making them more cost-effective. ERII is a leader in the desalination industry, and it has a strong commitment to innovation.
California Water Service (CWT) is a water utility company that provides water and wastewater services to over 2 million people in California. The company operates 1 desalination plant in California. CWT is a leader in the desalination industry and maintains a strong commitment to delivering dependable and cost-effective water services to its customers. This is another one of the big desalination stocks to consider. As California looks for solutions to water shortages and drought, CWT could be one of the fastest-growing desalination stocks on the list.
Edison International (EIX) is an American electric utility company that provides electricity and water services to over 5 million people in California. The company operates 1 desalination plant in California. EIX isn't one of the biggest desalination stocks on the list, but it's a happy middle. EIX also pays a dividend of 4.35%. That makes it the highest-paying dividend stock on our list.
Here is how some of the top desalination stocks have faired over the last five years:
Each of these desalination stocks is publicly traded. Some of these desalination stocks even pay a dividend. It's important to do your individual due diligence before buying any desalination stocks. That being said, it is hard to go wrong with any of these.
The World’s Biggest Desalination Plants:
Behind some of the biggest desalination stocks are the world’s biggest desalination plants. There are numerous renowned desalination projects constructed worldwide. The ones mentioned below are just a few examples.
The Sorek Desalination Plant in Israel is the largest seawater reverse osmosis desalination plant in the world. This plant, operated by IDE Technologies, produces 624,000 cubic meters of water daily. This amount is sufficient to meet the water needs of over 1.2 million people.
The Ras Al Khair Desalination Plant in Saudi Arabia is the largest seawater desalination plant by capacity. It produces 1,036,000 cubic meters of water per day, which is enough to supply over 2 million people. The Ras Al Khair Desalination Plant is operated by ACWA Power.
The Carlsbad Desalination Plant in California is the largest seawater desalination plant in the United States. It produces 56,000 cubic meters of water per day, which is enough to supply over 100,000 people. The Carlsbad Desalination Plant is operated by Poseidon Water.
The Ashkelon Desalination Plant in Israel is the oldest seawater reverse osmosis desalination plant in the world. It has been operating since 1999 and produces 220,000 cubic meters of water per day. The Ashkelon Desalination Plant is operated by Mekorot.
The Taweelah Desalination Plant in the United Arab Emirates is the largest seawater desalination plant by production capacity per unit area. It produces 100,000 cubic meters of water per day on an area of just 1.5 square kilometers.
As mentioned before, desalination is a growing field. Regrettably, not all of these plants are under the operation of public companies. Instead, some of them are operated by private companies. You can learn more about investing in private companies by following the link.
These companies are all leaders in the desalination industry, and they have a proven track record of success. As the world's population continues to grow, it is likely that we will see even more ambitious desalination projects in the future.
Benefits and Challenges of Desalination
Throughout the article, we have passively discussed some of the pros and cons of desalination. But here we will break it down a bit more actively.
Here are some of the benefits of desalination:
- Desalination can provide a reliable water supply in areas with limited freshwater resources.
- It can be used to produce high-quality water for drinking, industrial, and agricultural use.
- Desalination can help to protect freshwater ecosystems from pollution.
Here are some of the challenges of desalination:
- It is a relatively energy-intensive process.
- The brine produced by desalination can be harmful to marine life.
- The cost of desalination can be high.
Overall, desalination is a promising technology that can help to address water shortages around the world. However, it is important to be aware of the challenges of desalination before implementing it on a large scale.
Although desalination may not seem challenging at an individual level, commercialized desalination presents a different level of complexity. This is precisely why the desalination stocks on our list are highly esteemed.
Desalination Stocks and the Environment
Desalination can have a negative impact on the environment, but there are ways to mitigate these impacts. For example, desalination plants can be designed to recycle water and energy. But while desalination stocks may temporarily harm the environment, they have positive impacts as well.
We can’t forget the economic environment. The economic impact of desalination is overwhelmingly positive. Not to mention, the implementation of desalination can generate employment opportunities and contribute to economic growth in the respective areas. These desalination stocks aren't run by robots just yet.
Or how about the social impact of desalination? Desalination can have a positive impact on public health, as it can provide a reliable source of drinking water.
Additionally, the field of desalination technology is in a constant state of evolution, with new and innovative technologies being developed continuously. The world is pushing for greener solutions in every industry. Desalination stocks will not be unscathed by the green wave.
In fact, there are some desalination stocks with projects dedicated to providing clean water while not harming the environment.
Desalination Stocks Committed to a Healthy Environment
These are just a few examples of desalination stocks that are using recycled water and energy:
- Energy Recovery (ERII): ERII manufactures energy recovery devices for desalination plants. These devices help to reduce the energy consumption of desalination plants, making them more cost-effective. ERII is also working on developing new technologies that will use recycled water and energy in desalination plants.
- Consolidated Water (CWCO): CWCO operates a number of desalination plants in the Caribbean and the Bahamas. The company is committed to using recycled water and energy in its plants. For example, CWCO's desalination plant in Grand Cayman uses recycled water from a wastewater treatment plant.
- Veolia Environnement (VEOEY): VEOEY is a French multinational water company that operates over 500 desalination plants around the world. The company is committed to using sustainable practices in its desalination plants. For example, VEOEY's desalination plant in Israel uses recycled water from a nearby agricultural area.
- Suez Environnement (SZEVF): Suez Environnement is a French multinational water company that operates over 400 desalination plants around the world. The company is committed to using sustainable practices in its desalination plants. For example, Suez Environnement's desalination plant in Saudi Arabia uses energy from a nearby solar farm.
As the demand for water continues to grow, and as the environmental impact of desalination becomes more of a concern, these companies are likely to play an increasingly important role in the global water supply.
Final Say on Desalination and Desalination Stocks
Desalination is a subject of controversy due to its potential negative environmental impact. However, it is widely acknowledged as a crucial solution to combat water scarcity in many regions worldwide.
Increasing water demand in developing nations and rising freshwater costs are major factors driving the growth of desalination. There is a growing emphasis on utilizing renewable energy to power desalination plants, aiming to mitigate the environmental consequences associated with the process. Desalination technology is becoming more efficient, which is leading to lower costs. There is a growing awareness of the environmental impacts of desalination, and companies are working to develop more sustainable solutions.
Overall, desalination stocks are a superb investment opportunity. It is a growing industry with the potential to play a major role in meeting the world's water needs in the coming years.