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Invest in water with Coca Cola (KO)

Many people think water will be a privatized commodity in the future.  In fact, a google search of the phrase “water privatization” yields about 641,000 results. Another search for “how to invest in water” yields about 31,000,000 results.  There are many crazy ideas for investing in water. And some of them might even work… if you’re Ted Turner.

Most of our readers can’t buy their own aquifers. We also presume that you don’t have the space to store millions of gallons. So, how do normal people like us invest in water?

How Can I Invest in Water Privatization?

What we do know is that you likely have enough money to buy stock in companies. This is how you’ll invest in water.  So, how can one invest in water, and the privatization of water?  We wondered this for a while but the answer hit us in the mouth like the spice of a bubbly Coca Cola (KO).  What better way to invest in water than with a high quality stock like KO?  KO is a steady investment and it is even in the Dividend Aristocrats List!

How is Coca-Cola Positioned to Profit from the Privatization of Water?

Coca Cola is an undisputed beverage super-giant.  There is no question about Coca Cola’s role in the world beverage market. And, obviously, their products primarily use water!  Coca Cola is already in the water business with Dasani, but let’s just pretend the price of water went through the roof due to shortages and population growth.  Do you think a giant like Coca Cola would just roll over and say “Looks like we’re done?”

No way!  Coca Cola would adapt to the market.  If the profit margins on water passed those of soda, Coca Cola would most certainly ramp up their water production, if not outright purchase water sources.  They would become the McDonald’s of water production.

Update: I wrote this article in 2010 and it seems I was spot on about this whole thing. Here’s an article from The Motley Fool discussing how Coca Cola and Nestle have been purchasing water aquifers like crazy. Coca Cola continues to purchase water beverage brands including their recent acquisition of Aloe Gloe.

Wrap Up: Profiting from Water

If you thoroughly believe that water will be privatized in the future, then we are of the opinion that Coca Cola is the way to go, you get a known name brand, a well-managed company, a dividend, and a giant in the industry all for one price.  Even if water didn’t get privatized, it would still be a decent safe play in the end.

For those who wonder how to invest in water, our answer is Coca Cola, or one of the other major beverage giants.


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