Pollution and Environmental Small Cap Stocks

Environmental clean up and pollution management are hot industries, another green movement is upon us, seeking the best and most cost effective ways to dispose of and manage waste. These stocks are also perfect for the social responsible investing strategies that seek social good as well as profit.

Pollution and environmental clean up can be dangerous and time consuming work, but more importantly to the investor, expensive work. Thus finding a stock in this industry that has positive cash flow and little to no debt is a rarity. Finding growth stocks in this industry might seem more tough. Yet these three stand out from the rest. They are penny stocks based in the United States, each unique from the rest.  In addition they are small caps that are often forgotten with excellent growth opportunities.

 

1. Energy Recovery Research (ERII)– With this stock you also get exposure to the water sectors and desalination through reverse Osmosis. They make a device that is used in desalination plants that uses less energy making the process more affordable and more green. With the future of the worlds clean water supply in jeopardy this is an excellent start. However, it may be a long time before this becomes popular enough. Nevertheless the financials are sound. 
2. CECO Environmental Corp (CECE)– Industrial air clean up is the business of this stock. They produce powerful ventilation systems that control dust, fumes and airborne viruses. This stock has the best financials of any of these and is truly impressive to read about. It is also paying a 12% dividend which you will have to keep your eye on. Although it rewards you for buying it, it may be too much for such a small cap which should be poised for further growth. 
3. Fuel-Tech Inc. (FTEK) – The Motley Fool and Seeking Alpha have called this one of the best small cap stocks, being undervalued and overlooked. This company which produces a general line of environmental efficiency services as well as emissions control. They work mostly with energy producing facilities. I was not as impressed with the financials and notice you are paying a P/E of more than 40! Does it look good enough for that kind of growth and earnings?

Tagged Environmental, Green, Penny stocks, Pollution, Socially Responsible Investing