Updated on October 29th, 2021 by Bob Ciura
Water is one of the basic necessities of human life. Life as we know it cannot exist without water. For this simple reason, water may be the most valuable commodity on Earth.
It is only natural for investors to consider purchasing water stocks. There are many different companies that can give investors exposure to the water business, such as water utilities. Some other companies are engaged in water purification.
In all, we have compiled a list of over 50 stocks that are in the business of water. The list was derived from five of the top water industry exchange-traded funds:
- Invesco Water Resources ETF (PHO)
- Invesco S&P Global Water ETF (CGW)
- Invesco Global Water ETF (PIO)
- First Trust ISE Water Index Fund (FIW)
- Ecofin Global Water ESG Fund (EBLU)
You can download a spreadsheet with all water stocks (along with metrics that matter like price-to-earnings ratios and dividend yields) by clicking on the link below:
In addition to the Excel spreadsheet above, this article covers our top 7 water stocks today, that we cover in the Sure Analysis Research Database.
This article will discuss the top 7 water stocks ranked by a qualitative combination of their business model strength, current dividend yield, and future dividend growth potential.
Table of Contents
- Global Water Resources, Inc. (GWRS)
- Algonquin Power & Utilities (AQN)
- Essential Utilities, Inc. (WTRG)
- The York Water Company (YORW)
- California Water Service Group (CWT)
- American States Water Company (AWR)
- American Water Works Company, Inc. (AWK)
Water Stock #7: Global Water Resources, Inc. (GWRS)
- Dividend Yield: 1.6%
Global Water Resources is particularly appealing because it is a monthly dividend stock. In fact, it is the only American water company that pays dividends on a monthly basis. Water stocks are often praised for their very stable and secure cash flows. Adding the element of receiving dividends on a monthly basis further adds to investor certainty and total return predictability.
The company owns, operates, and manages regulated water, wastewater, and recycled water utilities primarily in metropolitan Phoenix, Arizona. Because Arizona’s water market is fragmented, combined with the fact it is currently the U.S.’s fastest state in terms of home ownership growth state, Global Water is benefiting from great organic growth prospects.
Source: Annual Report
Click here to download our most recent Sure Analysis report on GWRS (preview of page 1 of 3 shown below):
Water Stock #6: Algonquin Power & Utilities (AQN)
- Dividend Yield: 4.7%
Algonquin Power & Utilities Corp. trades on both the Toronto Stock Exchange and New York Stock Exchange under the ticker AQN. The renewable power and utility company was founded in 1988. The company has increased its dividend every year since 2011.
The three parts of its business are regulated utilities (natural gas, electric, and water), non-regulated renewables (wind, solar, hydro, and thermal), and global infrastructure.
Algonquin serves more than 1 million connections, primarily in the U.S. and Canada. It also has renewable and clean energy facilities that are largely (more than 90%) under long-term contracts with inflation escalations embedded.
Click here to download our most recent Sure Analysis report on AQN (preview of page 1 of 3 shown below):
Water Stock #5: Essential Utilities, Inc. (WTRG)
- Dividend yield: 2.3%
Essential Utilities is the second-largest publicly traded water utility in the U.S., serving approximately 5 million customers across 10 states. The company has raised its dividend for 29 consecutive years, which qualifies it to be a member of the Dividend Champions list.
The company has paid a quarterly dividend for 76 consecutive years.
Source: Investor Presentation
Click here to download our most recent Sure Analysis report on WTRG (preview of page 1 of 3 shown below):
Water Stock #4: The York Water Company (YORW)
- Dividend Yield: 1.6%
In the fourth position of our best water stocks is a company with two very unique characteristics. Firstly, The York Water Company is the oldest investor-owned water utility in the United States, having functioned continuously since 1816.
Secondly, and more impressively, the company features one of the most impressive dividend histories ever recorded. The York Water showcases a spectacular record of over 200 years of uninterrupted dividend payments to shareholders.
Source: Annual Report
Click here to download our most recent Sure Analysis report on YORW (preview of page 1 of 3 shown below):
Water Stock #3: California Water Service Group (CWT)
- Dividend Yield: 1.5%
California Water Service has six subsidiaries that provide water to about 2 million people, mainly in California, with some additional operations in Washington, New Mexico, and Hawaii.
California Water Service has increased its dividend for more than 50 consecutive years, which makes the company a Dividend King. You can see a full list of all 32 Dividend Kings here.
Source: Investor Presentation
Click here to download our most recent Sure Analysis report on CWT (preview of page 1 of 3 shown below):
Water Stock #2: American States Water Company (AWR)
- Dividend Yield: 1.6%
American States Water is a utility company with two business units: Utilities (primarily water, some electricity) and Services (wastewater services on several US military bases). American States Water is based in California, where it operates its utility business. The company’s services unit spans several US states.
American States Water is also a Dividend King, having raised its dividend for 66 consecutive years.
Click here to download our most recent Sure Analysis report on AWR (preview of page 1 of 3 shown below):
Water Stock #1: American Water Works Company, Inc. (AWK)
- Dividend Yield: 1.4%
American Water Works is the largest and most geographically diverse publicly traded water and wastewater utility company in the United States, as measured by both operating revenues and population served.
The company provides drinking water, wastewater, and other related services to over 15 million people in 46 states.
Click here to download our most recent Sure Analysis report on AWK (preview of page 1 of 3 shown below):
Final Thoughts
Water could be one of the biggest investing themes over the next several decades. An increasing global population is only going to cause demand for water to rise in the future. And, given the fact that water is a necessity of human life, demand for water should hold up extremely well, even during the worst recessions. Therefore, young investors with a longer time horizon such as Millennials should consider water stocks.
These factors make water stocks appealing for risk-averse investors looking for stability from their stock investments. Not all the water stocks on this list receive buy recommendations at this time, as some appear to be overvalued today. But all the water stocks on this list pay dividends and are likely to increase their dividends for many years in the future.
You can see more high-quality dividend stocks in the following Sure Dividend databases:
- Dividend Aristocrats List: 25+ years of rising dividends
- Dividend Achievers List: 10+ years of dividend increases
- High Dividend Stocks List: Dividend stocks with high yields above 5%