Wade into Veolia - Barron's

Shares of Veolia Environment may have slid some 12% from an all-time high in May to $75, but Barron's says the world's largest water company, instead, should be riding the wave of global interest in the planet's most precious commodity. The Company's CEO Henri Proglio blames profit-taking for the stock's decline, and told Barron's he expects a rebound. Analysts have an average one-year price target of $95 for the shares, although some see it reaching as high as $105. With less than 1% of the world's water supply drinkable, the Paris-based company is seen as a prime beneficiary of the need for clean water and beefing up related infrastructure. Opportunities for growth in waste management and desalination lead Proglio to believe he can double the size of the company in five years. One way will be through acquisitions. Proglio told Barron's he's "not afraid of any big deals," and that after raising almost $3.5B in June, the company can easily spend €8B on a purchase. Meanwhile, analysts believe Veolia can comfortably grow earnings at least 13% annually over the next three years.

Sources: Barron's
Commentary: China, U.S. and India Driving Water Infrastructure Spending • Water is the New Oil
Stocks/ETFs to watch: VE. Competitors: SZE. ETFs: PHO, FWT, CGW

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