Water utility services industry comprises of the companies and businesses or entities offering water supply and wastewater treatment facilities. These facilities are provided to commercial establishments, households, and industrial units. Apart from these facilities, treatment and sale of portable water and collection of stormwater/wastewater for treatment are also included. Experts believe that global water utility services industry is expected to compound annually at ~3.82% over forecast period (2023-2030). Revenue-wise, global water utility services market size was pegged at ~USD 67.30 billion in 2022 and this should touch USD 89.67 billion by 2030. Water utility services market should see significant growth rate as a result of growing population and urbanization. On the basis of application segmentation, residential has been predicted to show maximum market share in the year 2022.
Given the rise in number of people throughout the globe, water demand should increase simultaneously. With higher urbanization, urban cities should expect increased pressure on water utility service providers. This is because they need to deliver more water to growing number of consumers. This should stem market growth because water supply providers look for measures to address exponentially higher demand of people. Furthermore, utility industry growth is expected to be supported by growing rate of industrialization mainly in sectors which work with water on large scale like manufacturing and textile and several other sectors.
Apart from water utility industry, significant growth is expected in digital payments industry
Global digital payment market size touched value of USD 121.42 billion in 2022. This market is expected to compound at 15.3% over the forecast period 2023-2028 to achieve value of USD 247.42 billion by 2028. Digital payments market continues to see rapid growth worldwide, because of growing popularity of mobile wallets. Global 5G network deployment should increase digital payment market share. To achieve competitive advantage, e-commerce service providers continue to shift away from traditional debit/credit card and consumer financing solutions to client engagement strategies which take advantage of online payments. Digital payments offer significant advantages for individuals, governments, businesses, and organisations including cost savings, transparency, and security.
Another promising industry is automobile industry
Auto industry is expected to see continued growth throughout forecasted period (2023-2025). This growth is expected to be supported by recovery in overall economy and purchasing power and softer inflationary pressure and increased government support. Although conflicts between the US and China regarding technology access might exhibit periodic problems about chip shortages, increased investment in production in the US, Germany, and Japan should be able to translate into higher output. Therefore, in 2024 and 2025, semiconductor supply problems are expected to ease. Governments throughout the world continue to roll out measures for stimulating demand for battery electric vehicles which should offer the much-needed support. Apart from this, higher government spending on infrastructure development, improvement in logistics and online retail, and revival in tourism sector should stem increased demand for commercial vehicles.
Car industry should grow in the coming years, even though there are some macroeconomic challenges. Global car sales in 2023 should touch 69 million as a result of greater penetration in emerging markets, higher adoption of EVs and reopening of China.
With this in mind, let’s have a look at 3 stocks from these industries which hold huge potential.
1. Mastercard Incorporated
The company is the second- largest payment processor in the world, operating in more than 200 countries and processing transactions in more than 150 currencies. The company’s second quarter net income came in at $2.8 billion, with diluted EPS coming at $3.00 and adjusted net income of $2.7 billion. Net revenue of the company was $6.3 billion, exhibiting a rise of 14%, or 15% on currency-neutral basis. The company’s gross dollar volume grew by 12% and purchase volume was up 14% on a local currency basis.
Strong revenue and earnings growth stemmed from resilient consumer spending, mainly in travel and experiences, and strength in services. The company’s cross-border travel volume exhibited strong growth in 2Q, touching 154% of pre-pandemic levels.
During 2Q23, the company repurchased 6.5 million shares at cost of $2.4 billion and it paid $541 million in the form of dividends. Through 1H23, it repurchased 14.4 million shares at cost of $5.3 billion and the company paid $1.1 billion in dividends. On GAAP basis, the company expects net revenue growth in low-teens in 3Q23 in comparison to 3Q22.
2. The York Water Company
The company is an investor-owned water utility company situated in the US. Primary business of the company is to focus on impounding, purifying to meet or exceeding safe drinking water standards.
The York Water Company’s operating revenues came in at $18,767,000, exhibiting a rise of $3,868,000 as compared to 2Q22, with net income coming at $6,524,000. Higher revenues were supported by a rise in rates effective March 1, 2023 which was partially offset by reset to zero of the Distribution System Improvement Charge (DSIC). DSIC is a Pennsylvania Public Utility Commission allowed charge which water utilities get from their customers for the purposes of replacement of aging infrastructure. Increase in customer base added to the revenues too.
During first six months of 2023, it made investments worth $29.7 million in capital projects for armoring and replacing spillway of the Lake Williams dam and routine items and for several other replacements and improvements done to infrastructure. It projects that it should invest additional $30.4 million in 2023, excluding acquisitions.
3. General Motors Company
General Motors Company carries out operations under 8 brands and it operates under 4 segments: GM North America, GM International, Cruise, and GM Financial.
Mitra Future Technologies Inc., an innovator in North American production of lithium-ion battery materials, announced about completion of $40 million first close of $60 million Series B funding round which was led by GM. This investment should support Mitra Chem’s mission to develop, deploy and commercialize U.S.-made iron-based cathode materials.
The company has raised its CY23 guidance, with adjusted EBIT to come in the range of $12 billion-$14 billion and adjusted diluted EPS of $7.15-$8.15. It projects its adjusted auto FCF of $7 billion – $9 billion.
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