Many people believe that water will be a privatized commodity in the future. In fact, a google search of the phrase “water privatization” yielded about 641,000 results and a search for “how to invest in water” yielded about 31,000,000 results. There are a lot of crazy ideas out there that might work if you’re Ted Turner, but we will presume that most of our readers can’t buy their own aquifers and you don’t have the space to store millions of gallons.
What we do know is that you probably have just enough money to purchase stock in companies that can help you get into your water positions. 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 has been a relatively steady investment and it is even included in the Dividend Artisocrats List!
Coca Cola is an undisputed beverage super giant. There is absolutely no question about Coca Cola’s role in the world beverage market, and their beverage primarily uses the H2O ingredient. Coca Cola is already in the water business with Dasani, but let’s just pretend that the price of water went through the roof due to shortages and population growth. Do you think a leviathan like Coca Cola would just roll over and say “Looks like we’re done?”
Absolutely not! Coca Cola would adapt to the market. If the profit margins on water surpassed those of soda, maybe due to privatization of water sources, 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. 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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Disclosures: We are long KO.