Scientists reported this week that the earth experienced its hottest day on record, three days in a row. These are not milestones to celebrate. The human race faces an existential crisis.

University of Maine researchers announced that the entire planet sweltered under its hottest day ever on Monday, July 3. The record was broken the next day.

On Monday, the average global temperature reached 17.01 degrees Celsius (62.62 Fahrenheit), the highest in human record-keeping. On Tuesday, it rose to 17.18 degrees Celsius. The previous record of 16.92 degrees Celsius was set in August 2016.

The average global temperature hit a record high for the third day in a row on Wednesday, tying Tuesday’s average.

Heatwaves, wildfires, storms, and droughts are plaguing the world. The latest headlines tell the grim tale.

In the U.S., a heatwave is punishing Texas and the South, with triple-digit-Fahrenheit temperatures and high humidity. Europe is baking under a heatwave as well. Wildfires in Canada are sending toxic smoke into the skies of America. Floods are inundating India. Extreme drought is afflicting the horn of Africa. And you can be sure that the planetary record for hottest day will get broken again…and again.

Below, I pinpoint an environmental remediation company that’s well-positioned to profit from these regrettable but relentless trends.

Disaster capitalism…

Climate change is increasing the frequency and severity of extreme weather events. Enter Tetra Tech (NSDQ: TTEK), a leader in helping public and private sector organizations cope with various types of environmental challenges. Those challenges are only getting worse, which means that demand for the company’s services are only getting stronger.

Europe has been particularly hard hit by climate change. According to data released June 27 by research firm Statista, there’s been a dramatic increase in extreme weather events and natural disasters across the European continent since 1923.

More than 1,500 severe weather events, including droughts, floods, heatwaves, and storms, have occurred in Europe over the past 100 years, with two thirds of them having taken place since the turn of the century (see chart).

With clients around the world, Tetra Tech turns weather chaos into cash, while at the same time helping people and the planet.

With more than 20,000 full-time employees worldwide, Tetra Tech provides engineering and technical services for the water, energy, infrastructure, and natural resources sectors. The company specializes in risk mitigation and damage control related to climate change.

As environmental disasters grow in frequency and intensity around the world, Tetra Tech is the “go-to” environmental company.

Headquartered in Pasadena, California, Tetra Tech’s services are sought by commercial and governmental decision-makers who find themselves on the front lines of crisis. Environmental and humanitarian catastrophes wrought by climate change are vivid examples.

Hurricanes and cyclones are making vast swaths of coastline non-insurable. Whether the culprit for the emergence of freak “super storms” is man-made climate change or natural cycles, severe and unpredictable weather is a new global reality that governments appear helpless to prevent. That makes Tetra Tech the beneficiary of a secular megatrend.

The era of water scarcity…

Tetra Tech also is a play on the global water crisis, as pollution, overcrowding, urbanization, and the heightened frequency of droughts make potable water an increasingly scarce and valuable commodity. Unsafe water sources are responsible for 1.2 million preventable deaths around the world each year.

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According to recent studies by the scientific journal Nature, the world’s stores of groundwater, which accumulate over millennia in aquifers, are vanishing at an alarming rate. The result is persistent demand for reliable sources of clean, potable water.

According to the consultancy Global Water Intelligence, there’s a huge gap in the U.S. between expected expenditures and actual needs for water infrastructure (see chart below, with years 2022-2040 as projections):

The American Society of Civil Engineers (ASCE) recently released its report card for America’s infrastructure, a comprehensive assessment of 17 major infrastructure categories compiled once every four years. The nation’s grade point average this year: C-. Ordinarily, a weak grade would be disappointing, but for investors, it’s actually good news.

The ASCE found that the country’s total infrastructure needs over the next 10 years total nearly $6 trillion, but after considering various sources of committed funding, the gap to meet those needs is $2.59 trillion.

President Biden in 2021 signed a $1 trillion infrastructure bill, which invests in roads, bridges, railroads, water systems, and other projects. The massive federal funding already is providing more work for Tetra Tech. Infrastructure spending enjoys a bipartisan coalition of support, because it entails state and local spending that both red and blue states require.

It all adds up to huge, long-term demand for Tetra Tech’s highly specialized services. In the meantime, Tetra Tech continues to pick up lucrative contracts from federal and state agencies for environmental remediation.

With a market cap of $8.7 billion and several quarters of robust operating results under its belt, Tetra Tech possesses the financial wherewithal to aggressively compete in the construction bidding wars that typically emerge in the wake of natural disasters. It’s also poised to pick up a big slice of new infrastructure spending, in the U.S. and overseas.

Unlike its peers, Tetra Tech’s core competency is remediation and risk management, making it a purer play on these incidents as well as a company with more room for growth. By way of contrast, major competitor Fluor (NYSE: FLR) has fingers in many different types of construction projects.

What’s more, the world of environmental construction is governed by longstanding relationships. Through its already established presence in the corridors of Capitol Hill and various overseas outposts, Tetra Tech can leverage its proven track record to scoop up its share of contract spoils.

The average analyst expectation is for Tetra Tech’s earnings to grow year-over-year by 9.3% in the current quarter, 14.3% in the next quarter, and 13.8% for full-year 2023. Those are impressive numbers, considering the anemic earnings projections for the S&P 500 in the second half of 2023.

TTEK’s share price currently hovers above its 50- and 200-day moving averages, indicating that the stock is in an uptrend.

As a provider of essential services, the company is buffered against economic cycles and market corrections. You can disaster proof your portfolio, with a stake in Tetra Tech.

Editor’s Note: I just showed you how to make money from eco-disasters. if you’re looking for other ways to turn chaos into cash, I suggest you consider the advice of my colleague, Jim Pearce.

Jim Pearce is chief investment strategist of our premium service Mayhem Trader. He has spent the past year perfecting a powerful indicator that’s designed to make money in a hostile market. To learn more, click here.

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