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Stock Strategist

Smart Water Strategy Should Widen Xylem's Moat

We see long-term growth opportunities for the water technology company.


 Xylem (XYL) is one of the leading water technology companies in the world. Its extensive portfolio spans a wide range of equipment and solutions for the water industry, including the transport, treatment, testing, and efficient use of water for public utilities as well as industrial, commercial, and residential customers. Xylem operates three business segments: water infrastructure, applied water, and measurement and control solutions.

The water infrastructure segment serves primarily utilities and industrial customers and accounted for approximately 40% of Xylem’s revenue and 50% of segment EBIT in the first nine months of 2018. Water infrastructure supports the entire water supply network, with solutions ranging from collection of water from a source (aquifer, lake, river, and so on), transport, treatment (including filtration, disinfection, and desalination), and distribution to users, through the treatment and transport of wastewater to either prepare it for reuse or release it to the environment. Water infrastructure also provides dewatering solutions that are used in construction, fracking, and mining applications.

Krzysztof Smalec does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.