Investing in water utilities can be a lucrative opportunity for investors seeking stable returns and consistent dividends. However, there are risks associated with investing in this sector that investors should be aware of. Uncertainty over regulations is one of the main risks since water utilities' financial performance can be greatly impacted by changes in government policies and regulations. Water shortage and drought are potential risks that could lead to lower water consumption and higher operating expenses. Furthermore, old infrastructure may present problems for water companies, necessitating expensive renovations and repairs. Before making an investment choice, investors who are thinking about investing in water utilities should carefully assess these and other risks.
Risks of investing in water utilities.
- Thread starter Johnson2468
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Water is a free commodity because it's owned by the state, it's the distribution from the source to the households that require Big capital outlay. The private sector will always look up to the government for regulations and policies and the government sees it as an opportunity that it's better if the government will be the one that will operate this kind of business.
yes, indeed water is a free commodity and owned by the state, but private companies allow to take a part in the distribution of it, like you said it takes a lot of capital to do it, in my city water is still run by a company owned by the state but in other cities, private companies can join this distribution
There is actually very little to no risk in water investment, this is because water is something we make use of on a daily basis. No matter the kind of policy the government decides to place in water, we would still make use of it.
