However, its growth has been modest in recent years, and revenue actually fell 1.5% in 2022 to $491.5 million, due to a delay in raising water rates. As of the end of 2022, the company’s regulated utilities had 263,265 water customers and 24,656 electric customers. Water is a key input in everything from food and beverages to cleaning semiconductor wafers. The sourcing, purification, and distribution of water is big business around the world, and the threat of climate change makes that more true than ever.

If you’re looking to invest in water stocks, check out the best brokerages. If you want to learn how to invest in water stocks, continue reading to find out how to get started. Just like water rights, the barriers to pursuing this investment strategy are also bullish engulfing pattern high. The investments would have to be made on a very localized, regional basis, and would require fairly significant amounts of capital. The main issue is that it’s a perfect example of “greater fool theory.” The water right itself doesn’t provide any value.

Today, water is a $483 billion global industry (measured by revenue) that is facing intense challenges. Recent stocks from this report have soared up to +178.7% in 3 months – this month’s picks could be even better. The company has been a reliable dividend stock over the years and regularly increases its payout. It has a payout ratio of about 60%, meaning that it should be able to easily increase its dividend in the coming years.

  • The company is also highly profitable, with an operating margin of 41% in 2022.
  • Held a water conference in March that was a call to action to tackle global issues.
  • With this approach, you can access the money before you reach retirement age without paying any penalties.
  • At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors.
  • This rating change essentially reflects an upward trend in earnings estimates — one of the most powerful forces impacting stock prices.

Firms seeking to profit from water-related businesses include beverage providers, utilities, water treatment/purification firms, and equipment makers, such as those that provide pumps, valves, and desalination units. 2.3 billion people live in “water-stressed” countries, according to the United Nations, meaning that they use up more than 25% of their fresh water resources every year. 700 million people could be displaced due to water scarcity by 2030. MyBankTracker generates revenue through our relationships with our partners and affiliates. We may mention or include reviews of their products, at times, but it does not affect our recommendations, which are completely based on the research and work of our editorial team. We are not contractually obligated in any way to offer positive or recommendatory reviews of their services.

Daniel Milan, managing partner of Cornerstone Financial Services in Southfield, Michigan, has been investing in water via the First Trust Water ETF (FIW, $90.50) in portfolio models for the past four years. As the importance of water sustainability becomes ever more apparent, so too do the potential rewards of investing in water. As we navigate forex, surowce, indeksy, etf the uncertain waters ahead, Canadian investors can find solace in certain safe harbours. Let’s spotlight two exchange-traded fund (ETF) picks designed to target these defensive sectors. Momentum investors should take note of this Computer and Technology stock. WTS has a Momentum Style Score of B, and shares are up 2% over the past four weeks.

Primo Water Corporation

Water meters are remarkably complex and there has been a migration from manually reading meters to automatically reading meters. AMI (Advanced Metering Infrastructure) involves digital meters that have 2-way communication so utilities can communicate with consumers to help them save energy and reduce costs. Most, 2.5%, of the planet’s fresh water, is locked in the polar ice caps, in the soil, or irreversibly polluted. That means, as of now, 0.5% of all the water on the planet is potentially usable by people, animals, and plants. “It trades at a pretty reasonable valuation now,” says Keith, of Parnassus Funds. That compelling valuation is attracting the attention of investors.

You might be surprised to learn that a basket of these seven stocks would have easily beaten the S&P 500 index over the past decade. American States Water Company is a diversified utility company with several subsidiaries and three segments, including water, electric, and contracted services. The company plans to continue investing in the business and is forecasting between $22 billion and $25 billion in capital expenditures this decade to drive additional growth. It also completed 26 acquisitions in 2022 on top of 23 in 2021.

Its track record and size make it one of the best water companies to invest in. On top of that, the company continues to maintain its lead thanks to its innovative approach. It’s researching water treatment and distribution, wastewater treatment and collection, and biosolids management and energy management. While the Invesco Water Resources roboforex review ETF only invests in U.S.-listed companies, many of those businesses – including Danaher, Waters (WAT) and Roper Technologies (ROP) – are multinational operators. Invesco’s flagship water-themed fund, Invesco Water Resources ETF (PHO, $58.85), was launched in 2005, making it one of the oldest water investing funds you can find.

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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. “The global water supply is finite and there is no new water,” says Janet Glazer, portfolio manager for the Fidelity® Water Sustainability Fund ().

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You’ll notice that these companies also service key geographic regions, which is a key consideration when choosing any utility stock. One consequence of this for investors is that many utilities don’t have the pricing power that can lead to strong capital growth. However, one benefit to regulation is that it protects the existing companies that create barriers to entry. To that end, there is a consolidation going on in the industry which is resulting in a handful of large conglomerates.

If you are risk-averse, investing in ETFs may be a better choice for you. You don’t have to worry if you’re overwhelmed by the amount of different water stocks out there though. New and improved treatment plants, expanded pipes, and better waste-water networks. Obviously, prices depend on the demand for the water, which itself is a function of the need for water and the water’s use. For example, hydraulic fracturing generates massive demand for water as the development of an oil well requires 3-5 million gallons of water, and 80% of that water can’t be reused.

The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Still, the company is delivering steady growth and offers investors a unique opportunity as a rare pure-play water consumption stock. 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 company also expects to continue to make acquisitions to drive growth. 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.

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The company is involved in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection services. Investors have many ways to invest in water-related businesses and between individual equities and mutual funds/ETFs, there are solutions for investors of all risk levels. Although 70% of the earth’s surface is covered in water, approximately 97% of that water comes in the form of saltwater. And only about 1% of the world’s water is immediately available for human consumption. That fact highlights the need for water to be treated to ensure it is safe for everyday applications.

Advanced Drainage Systems is a pure-play water stock that gets most of its revenues (95%) from water-related activities, according to investment research firm Morningstar. “It’s my favorite water stock,” says Michael Halloran, an analyst at investment firm Baird. “They help put water back where it’s supposed to go safely.” Investors with time horizons of three years or more should fare well, he says. That’s where Advanced Drainage Systems’ (WMS) corrugated plastic piping and drainage products shine. Once stormwater hits its drains, its filters remove contaminants, its pipes direct the water away from streets, stores and homes, and its water-cleaning processes return clean water back into waterways.

Why Invest in Water Stocks?

Their system enables customers to collect, access and share data, as well as remotely manage treatment processes efficiently in real time, 24/7. Due to insufficient and old infrastructure, about 30%– 40% of water worldwide becomes non-revenue water according to the International Energy Agency. Non-revenue water is water that is lost due to leaks in the pipes, unauthorized use, corruption, or inefficiencies. This is where a SmartBallTM technology from a company called Xylem () comes in. This fund, launched in 2017, is a newer offering with a sustainability focus. Holdings must derive at least 50% of revenue from water-industry-related activities and earn high ratings on environmental, social and corporate governance measures.

Finder.com compares a wide range of products, providers and services but we don’t provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service. The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide.