Renewable Wealth Portfolio: Peerless Manufacturing (PMFG)

Welcome to the fourth installment in our model portfolio of green stocks . Our fourth pick is Peerless Manufacturing (NASDAQ:PMFG) Peerless is a manufacturer of filtration and purification systems for liquids and gas, and it its industry, its name is appropriate.

Peerless’s products are used in a wide variety of industrial applications. Just imagine all the industries which would value liquids or gases that are free from pollutants and impurities. But it is the company’s work in water purification and reducing air pollution that are of particular interest to us. The world-wide shortage of clean, fresh water is approaching crisis proportions, and while the story isn’t getting much press here in the U.S. right now, it won’t be long before it does. The U.S. water infrastructure is not aging well, and home demand for Peerless’s filtration products can only rise. And as awareness of climate change is (finally) spreading to the mainstream, demand for PFMG’s air filtration systems should continue to rise as well.

In short, Peerless is a play on clean water, clean air, and cleaner energy production. It’s on the list of companies that are building a cleaner future, and if Obama wins the election, the future will look especially bright for such companies.

At its present price, PMFG still has a smallish market cap of $352 million, so we can expect significant volatility, but that also means there’s plenty of room for growth. It’s trading at 25 times earnings, which is not out of line for a small growth stock, especially one that is debt-free like PMFG.

Solid green credentials, zero debt, and strong growth. PMFG belongs in our portfolio.

Author holds no position in PMFG at the time of writing.