Plumbing stocks may be a good option if you're looking for a solid investment. The plumbing industry is growing yearly, and companies offering plumbing services are always in demand. This article will discuss the best plumbing stocks to invest in and why they are a wise choice for your portfolio.
Why Invest In Plumbing Stocks?
There are several reasons why plumbing stocks make a good investment.
1. Growing Industry
The industry is growing. The demand for plumbing services is expected to increase by nearly four percent every year through 2022. This means that companies that provide these services will continue to see steady growth in their business.
Additionally, the cost of materials and labor associated with plumbing is rising. This means that companies that provide these services will be able to pass on these costs to their customers, resulting in increased profits.
2. Recession-Proof
The plumbing industry is also recession-proof. Even when the economy is struggling, people still need plumbing services. In fact, during economic downturns, the demand for plumbing services actually increases as people put off non-essential repairs and renovations. This increased demand helps to offset any decrease in spending that may occur during a recession.
3. Dividend Stocks
Many plumbing companies are also dividend stocks. This means they pay out a portion of their profits to shareholders as dividends. Dividends provide a steady income stream that can help offset any losses that may occur during a down market.
Additionally, dividend stocks tend to be less volatile than non-dividend stocks, which means they are less likely to lose value during a market crash.
4. Essential Services
Plumbing is an essential service. This means that people will always need plumbing services, regardless of the economy. This provides a level of stability for plumbing companies that other businesses do not have.
5. Good Value
Finally, plumbing stocks are often a good value. This means that they are priced lower than their true worth. This allows investors to buy shares at a discount and then sell them later for a profit.
What Are The Best Plumbing Stocks To Invest In?
Now that we've discussed why plumbing stocks make a good investment let's look at some of the best plumbing stocks to invest in.
Some of the best plumbing stocks to invest in include:
1. Aqua America (NYSE: WTR)
Aqua America is one of the largest water utilities in the United States. The company serves more than three million customers in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, Virginia, Maine, and Florida.
Aqua America is a dividend stock that has increased its dividend for 28 consecutive years. The company is a good choice for investors who are looking for a stable investment with a history of consistent dividend growth.
This makes it a great choice for income investors. The company is also a good value, with a price-to-earnings ratio of just 17.
2. American Water Works Company (NYSE: AWK)
American Water Works Company is the largest water utility in the United States. The company serves more than 15 million customers in 47 states. American Water Works is a dividend stock that has increased its dividend for nine consecutive years.
The company is a good choice for investors who are looking for a stable investment with a history of consistent dividend growth. This makes it a great choice for income investors. The company is also a good value, with a price-to-earnings ratio of just 18.
3. Ecolab (NYSE: ECL)
Ecolab is a leading water, hygiene, and energy technology and services, provider. The company serves more than three million customers in over 170 countries. Ecolab is a good choice for investors who are looking for a growth stock with a history of strong financial performance.
Ecolab has a market capitalization of $47 billion and generates annual revenue of $14 billion. The company's stock is up 25% over the past year, and its shares trade at a price-to-earnings ratio of 34.
While Ecolab is not a pure-play plumbing stock, the company's water, hygiene, and energy technologies are used in various applications, including plumbing. Ecolab is a good choice for investors looking for growth stocks with a history of strong financial performance. Investors should consider adding Ecolab to their portfolios.
4. MasTec (NYSE: MTZ)
MasTec is a leading provider of infrastructure construction services. The company's services include constructing and maintaining water, sewer, and gas pipelines. MasTec also constructs and maintains power generation facilities, oil and gas pipelines, and other energy infrastructure.
The company's stock has been on a tear in recent years, rising from around $15 per share in 2016 to its current price of over $50 per share. MasTec's strong performance is due to the increasing demand for its services as the U.S. population grows and infrastructure ages.
Investors who are looking for a play on the continued growth of the U.S. economy should consider MasTec stock. MasTec has already been awarded several large contracts, including a $700 million contract from the U.S. Army Corps of Engineers and a $400 million contract from Kinder Morgan (NYSE: KMI). These contracts are just a drop in the bucket for MasTec, as the company has a backlog of over $11 billion.
5. A.O. Smith (NYSE: AOS)
A.O. Smith is a leading manufacturer of water heaters and plumbing products. The company has a strong track record of growth, with its stock price rising more than fivefold over the past decade.
A.O. Smith is an attractive investment for several reasons. First, the company has a diversified product portfolio that includes both residential and commercial products. This gives A.O. Smith exposure to different end markets and helps to insulate it from economic cycles.
Second, A.O. Smith has a strong presence in China, which is the fastest-growing major economy in the world. The company has been investing heavily in China over the past few years and is well-positioned to capitalize on the country's growing demand for plumbing products.
Conclusion
The plumbing industry is a great place to look for dividend stocks with a history of consistent growth. American Water Works, Ecolab, and A.O. Smith are all attractive investments in the sector. MasTec is also a good choice for investors who are looking for exposure to the continued growth of the U.S. economy.