Water may not be a topic that comes to mind when you turn on the tap, but it is essential to human life survival. It’s also a multibillion-dollar business in the corporate world. Water is necessary for many products, including food and beverages and cleaning semiconductor wafers. As a result, water is a huge industry worldwide, and the threat of climate change makes it even more so.
Many climate scientists expect droughts to become more common in the coming years. These events are likely to make the price of water go up. As a result, some believe that mass desalination or removing salt from ocean water will be necessary to ensure an adequate global water index ETF supply.
Whatever happens, demand for the supply is increasing while the amount available is declining. That implies now is a perfect moment to think about water-related stock investments since water technology is developing, and the climate problem is sure to lead to further advances. Water stocks are most often utilities, although some are consumer essentials.
Keep reading to find out about the most significant water stocks appealing to invest in now if you’re interested in buying water stocks.
What Is Water Stocks?
Water stocks are firms interested in irrigation, utilities, water treatment, or other water-related industries. Individual companies’ stocks, mutual funds, ETFs with a lot of water exposure, and so on can be purchased to invest in these.
Why Invest in Water Stocks?
Only 1% of the earth’s surface may be utilized for drinking since approximately 80% of the planet is covered by water. One billion people lack access to drinking water, and between 3 and 4 billion do not have dependable access to water. Furthermore, the OECD predicts that worldwide water demand will rise by 55% between now and 2050, but at least two-thirds of the world’s population may already be in a state of “water stress” by 2025. According to the UN, our water use will rise by 85 percent by 2035 due to energy demand.
Water is necessary for every nation, but everyone does it differently. Previously, the public operated and owned water companies to guarantee that everyone had a good cost supply of the most valuable commodity. However, in many areas, water infrastructure has been privatized.
Some countries have gone further than others in the push to privatize their water sector. For example, the whole UK water market-based businesses have been handed over to private companies, while other governments still control most of their water resources. In many countries, private firms manage the entire network, while public-private partnerships are preferred in others. Knowing that each country has its regulatory framework is as essential as comprehending the investment profile of individual equities. Moreover, water companies generally operate in a stable and less volatile sector, making them ideal for long-term investor exposure and position traders.
How to invest in water?
There are several options for investing in water. For example, you may invest in equipment suppliers, such as pumps, meters, and filters, or water utilities and environmental organizations that clean, purify, or distribute water.
If you want to trade in the short term, you can use spread bets and CFDs to speculate on the price changes of the following assets. We’ll go into more detail about them later.
Although several different water utility equities worldwide are on the market cap, drinking all the water stocks should be carefully investigated. Water firms are always susceptible to financial difficulties, and thus interest rates should be thoroughly evaluated. It’s ideal to invest in businesses with a greater degree of stability. Furthermore, risk-averse investors should keep an eye on exchange rates when placing a geographically dispersed portfolio. The value of other currencies, such as the US dollar, the pound sterling, or the Chinese yuan, may be reduced, which is necessary for the fund’s expansion.
ETFs may be a convenient way to start investing in the water industry. With one single fund, they might be ideal for beginners. Individual investors can use Exchange Traded Funds (ETFs) to invest in water companies that produce desalination equipment, pipeline systems, building materials, and other products. The benefits of this asset class include diversification, passive management, and low costs. However, leveraged ETFs are complicated financial instruments that come with several risks. Therefore, only experienced traders should invest in leveraged ETFs.
10 Water Stocks to Watch
- American Water Works (AWK) –
The United States Water Works Company, Inc. (USWW), through its affiliates, provides water and wastewater services. Approximately 1,700 communities in 14 states rely on us to provide water purification and wastewater services.
The stock of Aqua America Water Works opened the day at $145.82, having closed the previous trading session at $148.27. The most recent price was $140.66 (25-minute delay). Colorado Springs’s largest water provider, Colorado American Water Works, is a New York Stock Exchange-listed firm with revenues of about $3.9 billion and 6,400 employees.
- Middlesex Water Company (MSEX) –
The Middlesex Water Company is a utility that provides drinking water and wastewater services. It has two divisions: Regulated and Non-Regulated. The Regulated segment, a water utility, collects, treats, and distributes water to residential, commercial, industrial, and fire protection customers and regulated wastewater systems in New Jersey and Delaware.
The share price for Middlesex Water Company opened the day at $83.21 after a previous close of $82.83. The latest value was $84.15 (25-minute delay). The NASDAQ-listed Middlesex generates around USD$146.8 million annual dividend, increases revenue, and employs 347 employees.
- California Water Service Group (CWT) –
California Water Service Group, through its affiliates, provides water utility and other related services in California, Washington, New Mexico, Hawaii, and Texas. The firm is involved in manufacturing, acquiring, storing, treating, testing, distributing, and selling water for domestic use, industrial use, public consumption, and irrigation. Water and wastewater services are available in approximately 494,500 customer connections throughout 100 California communities, including 6,200 water and wastewater connections on the islands of Maui and Hawaii; 36,400 customer connections in the Tacoma, Olympia, Graham, Spanaway, Puyallup, and Gig Harbor areas of Washington; 8600 water and wastewater connections.
The CWS stock opened the day at $57.54 after a previous close of $57.32. The most recent price was $57.96 (25-minute delay). Its a corporation based in the United States that provides water services. It has trailing 12-month quarterly revenues of approximately $816.2 million and employs 1,182 people.
- Global Water Resources (GWRS) –
A sustainable water utility firm, Water Resource Management Company, Inc., owns, operates, and manages regulated water, wastewater, and recycled water utilities in the metro Phoenix region of Arizona. It provides service to approximately 74,048 people in about 27,630 residences as of December 31, 2020.
The stock opened at $17.38, up from the prior close of $17.35. The current price is $17.42 (25-minute delay). The firm is a NASDAQ-listed water resources company with a trailing 12-month revenue of about $42.7 million and employs 86 staff.
- The York Water Company (YORW) –
The York Water Company is a water provider that impounds, purifies, and distributes the resource. The city’s water utility stocks are based out of Ridgeland, providing drinking water to Sumter County customers. The corporation serves an increasing global population of 54,000 people. It operates three wastewater collection systems, five wastewater collection and treatment systems, and two reservoirs with a combined capacity of 2.2 billion gallons.
- Essential Utilities (WTRG) –
The company’s primary subsidiary, Essential Utilities, Inc., is a regulated utility company business that provides water, wastewater, and natural gas services in the United States. In addition, it has a contract with the city to provide water services and maintenance. The stock of Essential Utilities started the day at $44.87, having closed the previous trading session at $45.62. The current price is $42.24 (25-minute delay). Essential Utilities is an NYSE-listed company that generates around USD$2 billion in annual sales revenue and has 3,211 workers.
- American States Water Company (AWR) –
The United States Water Company, through its affiliates, provides water and electric services to customers in the United States. The company comprises three segments: Water, Electric, and Contracted Services. The firm produces, distributes, and sells water as well as electricity.
On April 19, the Water Company’s stock opened at $78.11, up from its previous close of $79.05. The current price is $75.37 (25-minute delay). The American States Water Company is a water utility listed on the NYSE with trailing 12-month revenue growth of roughly $490.4 million and employs 808 people.
- Evoqua Water Technologies (AQUA) –
Evoqua Water Technologies Corp. develops water and wastewater treatment systems and technologies, mobile and emergency water supply solutions, and contract services for industrial, commercial, and municipal water treatment sectors in the United States and abroad. In addition, it’s a company that develops and sells technologies for healthcare providers. It has two segments: Integrated Solutions and Services and Applied Product Technologies.
After hitting a high of $32.40, Evoqua Water Technologies shares fell to a low of $32.10 the following day. The most recent price was $32.77 (25-minute delay). Evoqua Water Technologies is a significant water treatment firm with a market open capitalization of about USD$4 billion that employs 4,000 people.
- Coca-Cola (KO) –
The Coca-Cola Company is a global beverage corporation that creates, markets, and sells nonalcoholic beverages worldwide. The firm produces sparkling soft drinks, flavored and enhanced water, and sports drinks; juice, dairy, and plant-based beverages; tea and coffee; and energy drinks. It also sells beverage concentrates, syrups, and fountain syrups to restaurants, convenience stores, and other commercial establishments.
- Nestle SA ADR (NSRGY) –
Nestlé S. A. is a food and beverage business that, together with its subsidiaries, runs as a multinational corporation. The firm has three zones: Europe, the Middle East, and North Africa; North America; Asia, Oceania; and Sub-Saharan Africa. On Friday, May 10, 2015, Nestle SA ADR stock opened at $111.52 after a previous $111.05. The most recent price was $110.34 (25-minute delay).
Unlike gold and other precious metals, investing in water stocks does not guarantee a profit. However, keep in mind that — like any investment — water stocks are not exempt from risk. Because these companies operate in a highly competitive and fast-paced environment, their stocks are subject to significant changes. They’re also affected by market fluctuations and the bottled or tap water business, so be sure to do your research before investing. If you’re unsure where to start, read our article on investing basics. Then, even if you’ve been investing for a while, evaluate your brokers to ensure you’re getting the most out of your trading account.
Are water stocks a good investment?
Whatever happens, demand for the resource is rising while supply is restricted. Now, more than ever is a fantastic time to consider investing in water stocks because new technologies are being developed to meet the needs of a changing climate.
Are water stocks safe?
Investing in water equities and ETFs is one of the most secure wagers in today’s turbulent financial markets. Water stocks and ETFs are becoming more valuable and popular due to several key drivers, including ra quarterly dividend yield, ESG regulations, social aspects, and an absence of uncertainty.
Are water stocks overvalued?
According to GuruFocus Value, American Water Works Co’s stock is estimated to be moderately overvalued.
Why is it called watered stock?
The term may have originated among cattle herders who would force their cattle to drink copious quantities of water before transporting them to market. As a result, the cattle would seem heavier after drinking water, allowing ranchers to demand more significant compensation.
How to buy water stocks?
There are several options for investing in water. For example, you may invest in companies involved with water-related equipment, such as pumps, meters, and filters, or earnings per share of businesses that provide water utilities and environmental services like cleaning, purifying, or distributing water. If you want to trade in the short run, spread bets and CFDs are two more options.
Just Start Investing is a personal finance website that makes investing easy. Learn the simple strategies to start investing today, as well as ways to optimize your credit cards, banking, and budget. Just Start Investing has been featured on Business Insider, Forbes, and US News & World Report, among other major publications for its easy-to-follow writing.