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Suez is a leader in water but needs to expand beyond France and Europe. Revenues have grown well in slow growth Europe. There are so many new applications for water that Suez could be a part of. Suez Environment (OTCPK: OTCPK:SZEVF , OTCPK: OTCPK:SZEVY ), which recently changed its name to Suez, is in a growth business: water. The only problem is that Suez is too French. It relies on too much of its revenues in France and Europe and must expand globally if it wants to be a player. The company creates water and wastewater treatment plants for municipalities, mining sites, oil and gas, and many other commercial applications. 34% of sales are water in Europe and 40% European waste water. The rest is international. Suez has 553 million shares and trades at a market cap of €9.7 billion ($10.6 billion). It takes $1.10 to buy one euro. The earnings per share were €0.71 and the stock trades at a price to earnings ratio of 24.6. The dividend was €0.65 and the dividend yield is 3.7%. Free cash flow was €1.093 billion and the free cash flow yield was 11.2%. The Ebitda margin was 18.5%. Cash is €2.5 billion ($2.75 billion). This is compared to €2.9 billion ($3.2 billion) in short term debt and €7.8 billion ($8.6 billion) in long term debt. I must say that I’ve never seen a company go to such great lengths to obfuscate their balance sheet. Investor relations lists everything as a “Summary” Balance Sheet. Sales have increased from €11 billion ($12.1 billion) in 2005 to €14.3 billion ($15.7 billion) in 2014. Though sales have not increased dramatically, they have gone up every single year. The only down year was 2009 and sales were only down half a percentage point. The problem is that operating margins have decreased from 11.5% in 2005 to 6.5% in 2014. It shows in earnings per share which were up to €1.35 back then. Sales were up 7.5% in the first half of 2015 . It appears to me that even though sales have grown, expenses have outstripped sales. Only 28% of sales are outside of France and Europe. France has a reputation as being very unfriendly to employers and a tough place to do business. Perhaps it shows in Suez’s numbers. Management gets it. According to an article in the Financial Time, Suez is trying to change its brand to compete for larger corporate contracts. Suez’s waste division is very interesting. It collects and disposes of residential, medical, hazardous, and any other type of trash. The recycling division collects metals and papers. But again, it focuses on slow growth Europe. The shareholder structure is quite interesting. Holding company GBL (OTCPK: OTCPK:GBLBF , OTC: OTC:GBLBY ) holds 7.2%. Suez’s old parent company GDF Suez, now known as Engie (OTCPK: OTCPK:ENGIY , OTCPK: OTCPK:GDSZF ) holds 35.7%. A growing industry is converting methane gas at trash dumps into energy to be used as electricity. Suez has these capabilities but again, it must spread beyond Europe. With the droughts in California , many municipalities are looking to recycle waste water into drinking water. California is even going as far as recycling fracking water. Some of that fracking water is being used to water crops . This is interesting because energy companies are beginning to frack outside of the United States. It’s not just California that experiencing a drought . Brazil, Korea, and South Africa are too. Suez needs to break into these markets and use its brain power to find ways to recycle and conserve water. The United Nations estimates that by 2030, global demand for water will outstrip supply. Enter Suez. Clean drinking water is the name of the game. In municipalities all across the United States, residents can read how clean their drinking water is. It’s the first thing a city will pay for. In developing nations, this will soon to be the norm. Clean drinking water is the most basic need for healthy living. T. Boone Pickens sold his water rights to several municipalities a few years ago in Texas. I would be a buyer of Suez if they can expand their global footprint, which it has not. Their margins in Europe are just not cutting it. Water is a growth business. This isn’t a new concept. I would buy Suez when they show that they are a global player. What is impressive is that the company grew sales in a slow growth continent. This is a testament to the growth potential of water. It could be a long term buy and hold if it grows beyond Europe. Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.