Water Stocks & Water ETFs to Watch in 2023

https://1investing.in/ researching water treatment and distribution, wastewater treatment and collection, and biosolids management and energy management. The market abhors companies investing for the future right now, but Roku has a large cash balance of $1.9 billion heading into 2023 to warrant the investing while other competitors might not have the cash. The company had $487 million at risk form the SVB bank collapse, but with the uninsured deposits not at risk Roku ended Q1 with $1.7 billion in cash to fund operations.

• Water stocks are stocks of companies whose business is closely tied to irrigation, utilities, water treatment, or other water-related industries.
• When most people think about investing in water they think of commercial products that use water as a drink.
• In December, Essential Utilities’ subsidiary Aqua Pennsylvania bought wastewater assets of New Garden Township.
• When combined with Devices revenue of $106 million, total revenues are on a pace to reach $900 million.

These deals, which were for a combined $3 million, added about 1,400 new customer connections. In addition, at the end of the quarter, it had 27 acquisitions across nine states under agreement. These acquisitions — which total about $481 million — will add approximately 48,200 customer connections. The company has about 1.3 million total connections, including those in the pipeline. In 2023, American Water plans to invest a total of about $2.9 billion, including approximately $400 million for acquisitions, which is 19% more money than it spent on acquisitions last year.

Fidelity Water Sustainability Fund

The company manages water and wastewater services for consumers and businesses in the North West of England. This fund tracks the world’s largest 30 companies involved in water infrastructure, utilities or treatment. You can invest in the fund like a stock, by buying shares of the fund.

This gives CFWAX access to “the water value chain not found in other strategies” that typically only focus on water-related industries, says Calvert’s Eames. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds. Please note that past performance is not a reliable indicator of future results. If you are looking to trade in the short-term, you can also trade on the price movements of the below assets using spread bets and CFDs, which we will talk about further on.

If you are looking for a water stock with high growth potential, this is a great stock to consider even for a short-term investment. Essential Utilities is based in Pennsylvania and is one of the most well-known water and wastewater utility companies in the area. Drinking water is always going to be trending with the number of people in the world constantly increasing. York Water specializes in wastewater management, water-related services, and the production of clean drinking water. Its operations cover over municipalities with plans to expand its reach in the coming years. There are many cheap water stocks to choose from, but to make our list, companies need to fall under a specific set of criteria.

Are water stocks right for you?

Investing in water stocks and ETFs is one of the safest bets in the volatile markets of today. Investors are hungry for stocks that have an intrinsic ESG value and are also aligned with new climate standards. Water stocks will be the top beneficiaries of the renewable energy push worldwide. President Biden’s push to achieve net-zero carbon emissions by 2050 and his $2 trillion investment will help the utility sector as a whole.

There are approximately 50,000 water utilities and 15,000 wastewater operators in the United States. However, most of these are very small and operate at or near loss. Therefore, consolidation is inevitable for the fragmented water industry and at the same time offers great growth potential for the listed water utilities.

This makes this company one of the best water stocks to consider buying. Whatever happens, demand for the resource is increasing while the supply is limited. That means now is a great time to consider investing in water stocks since water technology is advancing and the challenge of the climate crisis is likely to spawn further innovations.

As of Feb. 1, 2021, the ETF was trading at around $72, up from about $62 per share during the same period last year. The regulations are creating barriers to entry… but also protecting the existing companies. As a result, water utility stocks can provide steady cashflows and dividends. To get a better idea of their potential going forward, let’s look at some company highlights. Many investors are now choosing to focus on water companies that have a strong focus on renewable energy and climate change friendly business practices.

Before you start trading, please ensure that you fully understand the risks involved. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. Suez Environnement is another French company that specialises in water management and wastewater management. The company has undergone some huge changes since being founded in 2008. The chart above shows the long term monthly price trend of American Water Works stock price.

New here? Not sure where your financial journey should be headed?

There are a couple of great reasons to explain why investing in water makes sense. Our blue planet is full of water as around 70% of the earth’s surface is covered with it. But you might be wondering why would anyone invest in something as abandoned as water.

• Primo Water grew its revenue by 7% in 2022 to $2.21 billion with 17% growth in its water exchange, offset by its exit of the single-use bottle business in the U.S. and its pullout from Russia.
• The merger is likely to create one of the world’s largest waste and water services companies with more than €37 billion in annual revenue.
• The company is mainly engaged in wastewater treatment, water supply, reusable water, wastewater source heat pumps, research and development of water environmental technologies and engineering construction.
• The “digital water” landscape is full of growth opportunities, as companies begin to launch platforms to increase water quality, monitor water usage, control costs and expand reach.
• The following three stocks all conduct business from water, and have solid dividend yields with annual dividend increases.
• No one has a crystal ball, and it’s impossible to know for sure if water stock prices will go up in 2021.

Essential Utilities currently pays a 2.7% dividend yield and has a long history of raising its dividend. Planet Earth’s surface is made up of about 71% water, but only 2.5% is fresh water, while salt water makes up the remainder. Access to fresh water is important because it’s what we need to drink, bathe, cook, and grow food. This information is intended to be educational and is not tailored to the investment needs of any specific investor. I look at how well the company generates free cash flow and how well it has allocated capital throughout its history. ​​ to decide the product most suited to your trading personality and overall goals, and then open an account using the sign-up link below.

Investing For 2024

Some believe that mass desalination, or removing salt from ocean water, will be necessary to ensure an adequate global water supply. If you haven’t been purchasing water stocks in the past, there’s still opportunity right now, giving you the chance to keep your portfolio strong even during a downturn. Water is a precious commodity, and if governments can’t give people access to clean water, they will need to hire corporations to help solve the problem, which is where your investments come in. The Global Dow Index is an equal-weighted stock index designed to measure the stock performance of 150 leading companies from around the world. In 2015, Rand Water, the largest water utility in Africa embarked on its largest pipeline condition assessment investigation, examining a little over 2,200 kilometers of Rand’s high pressurized pipeline network. They used Xylem’s SmartBallTM, which is a multi-sensor tool used to detect and locate the acoustic signatures related to leaks and gas pockets.

It’s also paid 609 consecutive quarterly dividends, which is believed to be the record for any U.S. company. Waiting for stocks to bottom out isn’t necessary, as you’ll still be purchasing water stocks while they are going down or rising back up. But as we’ve seen over the last five years, buying the best water stocks can lead to massive gains. Currently, it’s unknown what, if any, water stocks Burry has purchased.

Sign up now for a risk-free, 2-week trial to start finding the next stock with the potential to generate excessive returns in the next few years without taking on the out sized risk of high flying stocks. The Primo Water brand may be best known for its exchangeable water tanks available at big-box stores, but the current Primo Water is the result of beverage company Cott Corporation acquiring Primo Water in March 2020. Cott sold its coffee and tea business and rebranded as Primo Water to become a pure-play water company. In January of 2023, the company announced it will acquire Evoqua Water Technologies, which provides mission-critical water treatment solutions, creating an industry leader with $7 billion in combined revenues. American States Water Company has been less acquisitive than other water utilities, although its profits grew steadily from $1.62 per share in 2016 to $2.11 in 2022.

Overall, the water market in the U.S. is highly diverse, complex and decentralized. There are many different players in the market, including municipal and private water providers. Some states have enacted strict laws and regulations to regulate water supply and consumption. However, in other states, there is less regulation and the water market is more supply and demand driven. Water company stocks can be impacted by rising rates (which raise the cost of borrowing—a significant cost for capital-intensive companies within the water industry) and supply chain problems , among other risks. Water industries, such as water utilities, can also face potentially disruptive regulatory risk—the risk that regulation could impact their operations.

The Greek water market is part of the liberalized energy market in Europe and has certainly changed in recent years. The government has taken steps to privatize and modernize the sector to meet the demand for clean water and enable more efficient use of resources. In doing so, the government is committed to sustainable water management and is promoting the use of technologies such as seawater desalination and water recycling to ensure water supply. However, this is currently still happening too slowly due to financial constraints.

Green investing consists of investment activities that focus on companies or projects committed to the conservation of natural resources. The Chicago Mercantile Exchange has tradeable water futures that are tied to water prices in California. These futures contracts allow investors to bet on the future value of the Nasdaq Veles California Water Index, effectively betting on the future price of water. Adding a few of these companies to your portfolio might be a great move in the years ahead. If you’d like to learn more about how to best position yourself in under valued stocks mispriced by the market heading into a 2023 Fed pause, consider joining Out Fox The Street. In the first quarter of 2023, the company closed on five acquisitions across two states.

I think we’re at a tipping point when it comes to global water scarcity. The 3 main problems exacerbating the crisis of water scarcity include the lack of sufficient infrastructure, a booming population, and climate change. These factors are going to put an enormous strain on an already fragile water system.

Serving the unsome primary ideas about commodity swaps and regulated markets has made itself an invaluable addition to the water industry. For those looking to diversify their portfolio or transition over to green stocks, this is a great way to get your feet wet with minimal risk. This EFT has also shown high dividend yields which is an attractive trait for any level of investor. Many water companies are still private, and though their water purification stocks may be lucrative, they are only available to those who are already part of the company. While this renown company is not necessarily in the water industry a part of their environmental and waste management business does operate in the water sector. As of the end of the third quarter, 14 hedge funds tracked by Insider Monkey held stakes in California Water Service.

The company makes more than $3 billion a year with most of its shares held by larger institutional investors. The company is also highly profitable, with a net profit margin of 20%. American Water Works is the country’s largest water utility stock. Like other utilities, it benefits from being a regulated monopoly, meaning that the company doesn’t face competition in the regions where it operates.

As of the end of 2022, the company’s regulated utilities had 263,265 water customers and 24,656 electric customers. York Water has made a number of acquisitions in its territory to boost growth, but it operates in a slow-growing part of the country. The company’s total customer count increased slightly from 71,411 at the end of 2019 to 76,731 at the end of 2022.

However, choosing where and how much to invest is the more difficult question. Fresh water is a limited resource, and it makes perfect sense to invest in something that’s scarce. Climate change, increased consumption, and pollution make water-related investments attractive.

Andrea Gobatti

Author

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