Zefiro Methane, RWE, and KSB under the microscope: Three stocks for the new energy infrastructure boom

08 July 2026 01:24 (EDT)

Zefiro Methane: Cleanup specialist with doubling potential

Speculative investors are currently finding a really exciting story in Zefiro Methane. The Canadian specialist tackles a problem in North America that flew under the radar for decades. In the US, there are millions of abandoned oil and gas wells, many of which are orphaned, poorly documented or leaking. The former operators are in some cases long since dissolved, bankrupt or barely reachable in legal terms. What remains are wells from which methane escapes. In terms of climate, this is a real problem because methane is significantly more harmful than CO2 in the short term. For specialized service providers like Zefiro, a multi-billion-dollar market is emerging. Zefiro plugs old wells, remediates sites, measures methane emissions and provides environmental services for authorities, states and companies. The real appeal, however, lies in the company’s combination of classic oilfield-service craftsmanship with modern emissions measurement and, in perspective, CO2 certificates. From the dirty legacy of the fossil industry, a scalable environmental business could thus emerge. It is precisely this mix that makes the stock so interesting. This article is disseminated in partnership with Apaton Finance GmbH. It is intended to inform investors and should not be taken as a recommendation or financial advice.

Operating business is booming

Operationally, too, Zefiro is picking up pace. In the first nine months of the current 2025/26 fiscal year (as of the end of March), Zefiro generated revenue of around USD 33 million, corresponding to growth of around 36% compared with the prior year. In the third quarter alone, revenue rose by more than 58% to around USD 11 million. Profitability is also improving steadily. Adjusted EBITDA reached around USD 4.25 million. Zefiro thus shows that money can indeed be made by plugging old wells and monitoring methane emissions. The company expects revenue of more than USD 40 million for the full year. For a small cap of this size, that is a solid jump and, given the operating performance of the first nine months, a rather conservative forecast.

Full order book

The company recently won four new customers from the energy sector, three of them listed companies. The orders cover the decommissioning of production, storage, injection and salt wells in Ohio and Indiana. At the same time, the company launched a major contract in Ohio, running through May 2029, with a potential volume of approximately USD 19.6 million. In addition, Zefiro secured three further projects to plug orphaned wells with a total value of around USD 2.4 million, financed from the US infrastructure program. In early May, Zefiro Methane reported the acquisition of assets and equipment from Viking Well Service for USD 4.3 million. This expands the fleet by five drilling rigs and additional heavy equipment. Above all, however, the company opens up important new states such as Illinois and Michigan. Management expects additional annual revenue of more than USD 10 million from the acquisition.

Imagination through data centers

A new aspect of the story is particularly exciting. Zefiro is moving increasingly toward energy infrastructure and data centers. In the US, new energy facilities, grid connections and power-supply projects are currently being built because AI data centers need gigantic amounts of energy. But it is precisely on such sites that orphaned oil and gas wells are repeatedly discovered. As long as these are not properly sealed, construction projects can stall. At the end of June, Zefiro reported that the company is expanding its focus to include such energy infrastructure projects. In Pennsylvania, Zefiro was already involved in a project to convert a former coal-fired power plant into a cleaner gas-fired power plant. Nine old gas wells were discovered on the site. In Louisiana, the company also completed a project worth USD 5 million three weeks ahead of schedule. In the long term, the growth potential in this area is enormous. According to its own statements, US utilities are expected to invest an estimated USD 1.4 trillion over the next five years to expand and strengthen the power grid. At the same time, data centers could account for up to 9% of US electricity consumption by 2030. Even more exciting, however, is the high-margin monitoring business. As part of a major contract in West Virginia, Zefiro Methane recently examined 849 wells for methane emissions. The margins for these services are roughly twice as high as those for classic well plugging. In addition, the company uses its own measurement technology and is now generating initial revenue from the so-called REED technology for sealing leaking well casings.

Additional business through emissions trading

The additional twist to the growth story is that Zefiro Methane earns not only from plugging wells but, in the future, also from trading CO2 certificates and emission credits. Several of the firm’s top managers come from the emissions trading desks of large US banks, such as JPMorgan and have extensive experience and expertise in this area. The combination of environmental technology, infrastructure and emissions trading makes Zefiro Methane’s business model highly scalable. CEO Catherine Flax presented at the recent IIF. https://youtu.be/nNodjcqNJMM Zefiro’s stock holds plenty of imagination, but it is not a sure thing. At this stage, Zefiro remains highly speculative, and investors should also expect price swings. Moreover, the company remains dependent on financing, project awards, funding programs and regulatory support. The market for emission certificates can also fluctuate. However, the underlying issue does not disappear. Abandoned wells and leaking methane remain. In addition, infrastructure demand is rising due to power grids, gas-fired power plants and data centers. That is precisely why Zefiro Methane remains one of the most exciting speculative environmental and infrastructure stocks in the small-cap segment. If the company manages to translate the recent momentum into sustainable growth and stable profits, the market could re-rate the stock entirely. Even though the share has already gained more than 100% over the year, the stock could well double again in the coming months.

RWE: The big German energy anchor

For investors seeking a more defensive energy sector exposure, RWE is an option. The Essen-based group is not a hot small-cap, but rather one of the large European utilities. While Zefiro clears away the dirty legacy problems, RWE delivers the big electricity story on renewable energy, flexible power plants, battery storage, offshore wind, gas-fired power plants, and energy trading. RWE has driven the transformation far forward in recent years. From the old coal utility, an international electricity producer has emerged, investing heavily in renewables and flexible capacity. In the first quarter of 2026, adjusted EBITDA rose by 25% to EUR 1.6 billion. Adjusted earnings per share likewise increased by 25% to EUR 0.85. The group also confirmed its outlook for 2026 and the dividend target of EUR 1.32 per share. Above all, the project pipeline is important. Since March 2025, RWE has increased capacity by 2.3 gigawatts. In addition, projects with a combined 10.4 gigawatts are under construction. For the full year, the group plans net investments of between EUR 6 and 8 billion. Recently, the Essen-based energy group agreed to acquire 55% of the shares in Amprion, thereby becoming the majority owner of the German transmission system operator. This brings fresh movement into the investment story. The topic is not entirely new for RWE. Previously, the group already held around 20% of Amprion via a joint venture with Apollo Global Management. Now, however, the stake becomes a strategic cornerstone. With around 11,000 km, Amprion operates the second-largest extra-high-voltage grid in Germany. This places the company at one of the most important junctions of the energy transition. Because wind farms, solar installations, battery storage, data centers, industry and consumers will have to be connected much more strongly with one another in the future. Without powerful grids, the beautiful new electricity world remains patchwork. That is precisely why the entry is more than just a financial stake for RWE. With this step, the DAX company is building a third pillar alongside electricity generation and renewable energy. Particularly appealing: grid businesses are heavily regulated but, in return, deliver comparatively stable and well-planable earnings. On the stock market, that is not as spectacular as offshore wind or hydrogen fantasy, but it can be valuable over the years. The transaction was financed, among other things, via a capital increase with which RWE raised around EUR 4 billion. In chart terms, the stock is emerging from a longer breather. After the strong run through March, the stock has recently moved sideways. In the region around EUR 54, however, the share found support again and turned upward. Should the market in the future value the stronger grid business at a higher stability premium, new share-price potential could arise.

DAX stock with substance and balance-sheet strength

RWE thus remains one of the most exciting German energy anchor stocks and a broadly positioned beneficiary of the infrastructure boom. But the RWE stock, too, is not a sure thing. The trading business can fluctuate, electricity prices remain volatile and high investments weigh on the balance sheet at times. Political interventions are always part of the game with utilities as well. The blue chip, however, has plenty of substance and balance-sheet strength. Those who want to play the energy and infrastructure story more defensively will therefore find a solid option in RWE.

KSB: The Quiet “Picks-and-Shovels” Play of the Infrastructure Boom

The third stock under review is KSB. The pump and valve maker from Frankenthal is a classic shovel seller of the infrastructure wave, founded in 1871. KSB is one of those German industrial stocks that exude little glamour but are tied to a surprisingly large number of growth themes. Water management, mining, chemical parks, data centers, heat pumps, hydrogen, desalination plants and even nuclear power plants: wherever liquids have to be moved, cooled or transported under high pressure, KSB’s pump technology comes into play. In the nuclear area in particular, the barriers to entry are high. There, safety certifications, decades of know-how and industrial reliability are required. That is exactly what makes KSB strategically interesting. On the stock market, this quality was rewarded for a long time. The preferred share was one of the strongest SDAX stocks in recent years. However, since the record high of more than EUR 1,280 in March, the stock has corrected significantly. The trigger was the cautious outlook for 2026. The forecast range is unusually broad, allowing for both growth and a slight decline in revenue. The unchanged dividend of EUR 26.76 per preferred share also disappointed some investors. In the first quarter of 2026, order intake rose by 15.2% to more than EUR 1 billion. The pump business was especially strong, with a 31% gain to EUR 633 million. In the energy market, order intake even jumped by 359% to EUR 257 million, driven by a major order for a power plant in Eastern Europe. Revenue, at EUR 712 million, was slightly above the prior year, but EBIT fell to EUR 39.8 million. The EBIT margin reached 5.6%. Thus, KSB is not free of short-term headwinds. The global economy remains challenging, and geopolitical tensions weigh heavily. In addition, the service business ran weaker in the first quarter. The SAP migration also continues to cost money. It hit the books at around EUR 27 million each in 2025 and 2026, depressing the margin. The decisive point, however, is that this burden is only temporary. After the planned completion in early 2027, the expense should fall away. Adjusted for this effect, the operating margin in 2025 would already have been 9.2%.

Full order book and plenty of substance

The strong order intake also indicates that demand in central markets remains strong. The energy sector, in particular, could gain importance in the coming years, as new power plants, grids, water projects and industrial facilities are built worldwide. The strategic goal “TEN30” targets an operating margin of more than 10% and order intake of at least EUR 4 billion by 2030. The solid balance sheet with an equity ratio of around 46% provides a tailwind. The group generated around EUR 3 billion in revenue in 2025 and employs about 16,800 people. For investors who do not want to play infrastructure via project developers or highly valued growth stocks, KSB is an interesting alternative. In the long term, the growth drivers remain intact. Water scarcity, desalination, modern power plants, data centers, industrial heat pumps and hydrogen need pumps and valves. In addition, KSB is expanding its digital services business through its stake in the AI startup Aiomatic. The software detects equipment wear early and can prevent failures. Step by step, this turns the classic mechanical engineer into a provider of infrastructure technology, service and digital plant monitoring.

Quality stock for infrastructure

After the recent price correction, the stock looks interesting again. For 2027, the expected P/E ratio is in the single digits, and the dividend yield is around 3%. The next important date is the half-year report on 6 August. If order intake stabilizes even without individual major projects, a bottoming out should succeed. For patient investors, KSB remains an exciting quality stock around the future-oriented business of infrastructure services.

Zefiro Methane, RWE and KSB serve completely different areas of the energy and infrastructure market. Zefiro clears away the legacy problems of the old fossil world and could additionally benefit from the construction of new energy infrastructure for data centers. In this trio, the stock is the most speculative, but in return it also holds the greatest share-price potential. Should the company continue its recent growth momentum, utilize its new capacity and expand its higher-margin monitoring and certification business, the market could re-rate the stock entirely. RWE is the big German electricity and energy-transition anchor with billion-euro investments, a project pipeline and a dividend. KSB, in turn, is the quiet mechanical-engineering beneficiary whose pumps and valves are needed in almost every infrastructure wave.

Conflict of interest

Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a “Transaction”). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company. In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships. For this reason, there is a concrete conflict of interest. The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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