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Xylem (XYL) is that rare coin on raw market–a pure play water stock at a time when foresighted investors are looking for water stocks and realizing how few of them exist. (The basic water story is that Mother Nature isn’t making more of it. Rising global populations need more of it. And human beings are doing a good job of polluting the supplies (when those supplies are actually near the people that need them) that do exist. Which makes water management a growth sector.)

That doesn’t mean that Xylem doesn’t fall when the market plunges into a bear. From $89.13 at its 2020 high on February 12 the stock fell to $56.64 on March 23. (Shares closed at $68.16 today, May 28.)

But it does mean that the shares are extraordinary for their ability to beat the market by a decent margin over the long term. For the last 3 years, the average annual return on Xylem shares has been 9.19%–that’s 1.95 percentage point above its benchmark index. For the last 5 years Xylem returned an avenge of 9.18%, that’s 5.62 percentage points above its benchmark index.

It’s not hard to understand why Xylem should have this kind of performance record. Once a water supplier has decided to go with Xylem, there’s very little incentive to change equipment and service providers. And Xylem is a very effective one-stop provider with equipment and services  that include the transport, treatment, testing, and efficient use of water for public utilities as well as industrial, commercial, and residential customers. Xylem amplifies this stickiness by pushing ahead with new technology. For example, it’s acquisition of Sensus in 2016 gave Xylem a technology platform that includes smart meters, leak detection, and a data management capability to monitor and analyze data. Want to figure out how to cut down on wasted water and how to maximize the efficient of your water operations? Xylem is your compny.

Most of the time I’m content to let Xylem sit near the bottom of my Jubak Picks Portfolio. Even after a big drop in the March plunge, shares of Xylem are up 166.56% since I added them to that portfolio on September 4, 2012.

But I’m bringing the stock up now because I see a likely buying opportunity sometime in 2020. With states and cities strapped for revenue because of the cost of fighting the coronavirus pandemic, and industrial water users and large providers uncertain about what they might need to spend on water infrastructure, I can see a down quarter or two ahead for Xylem. The drop might even be of a magnitude near that suffered in March.

Investors looking for solid long-term returns don’t get a chance to buy Xylem very often. I think there might be an opportunity in the cards before the end of 2020. I wouldn’t miss it.