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Investment outlook for water utilities

Posted by: Maven on April 20, 2009 at 6:40 am

From Seeking Alpha:

The Wall Street Transcript recently interviewed Timothy M. Winter, a Senior Vice President at Jesup & Lamont Securities Corporation, on his outlook for water utilities. Key excerpts follow:

TWST: How has business been in the water utilities space through this economic downturn? I would guess it’s not very sensitive.

Mr. Winter: The water utility group is among the least economically sensitive groups or sectors in the market. The bulk of retail sales and revenues are from residential customers who do not experience the economical swings in volume that the industrial or commercial classes do. Water utility bills are low enough that typical residential customers do not change consumption patterns. Roughly 3%-10% of retail revenues are derived from the industrial sector, where volumes sold are directly related to the economy. While industrial water sales have declined, we emphasize that a 10% consumption decline from the industrial customer class, which totals only 5% of retail revenues, doesn’t impact the bottom line significantly. So yes, this is probably the most economically resilient group out there.

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April 20, 2009 · Filed Under Investing in water

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