Monday, September 20, 2021

10 Best Water Stocks And ETFs To Watch Out For In 2021

While the majority parts of the world experience extreme water shortage, stakes are high and bets on water stocks are up.


Earlier we talked about the debut of Water as a commodity on Wall Street. Just like gold, currency, and oil, water is now a commodity in America and can be traded on the stock exchange as witnessed in California. With the increasing impact of climate change all around the globe, the ravages of the water crisis have already started creating a negative impact on the majority of the countries. Having said that, the most essential element on earth that once used to exist in abundance is now depleting rapidly, and will soon become a privilege for the parts of the global population.

READ: Water is now on Wall Street- Investors looking straight into the future.

When something becomes so precious and finite, it appears on Wall Street.

Given the alarming situation of climate change and population explosion, water stocks are sure to emerge as the biggest investment stream over the next couple of decades. This is one commodity that will never run out of demand even during a recession or a war.

Let’s take a look at some of the best water stocks and ETFs to invest in in 2021.

10 Best Water Stocks To Buy In 2021

1. American States Water Co.

With a subscriber band of over 250,000 customers, this California-based water utility giant is a major player and provides water and electricity services in close relation to the American government. According to reports by major analysts, a vast majority of hedge funds across the USA have a bullish view of the company going forward. With a market valuation of $3.34 billion, the company is the leading buyer and distributor of water supply in California.

2. American Water Works

American Water Works is based out of New York but has operations being regulated in well over 14 states. Besides its main business, the giant serves various other domains namely homeowner and military services building water systems for the U.S military and the common man. Pleasing the investors with an ROE of 7.7%, American Water Works can be your go-to stock if you’re looking to park your corpus for the long term.

3. California Water Service Group

Although showing stagnant growth over the last few quarters, the CWT share price has shot up significantly over the last few years, 112% to be precise. Last year’s Californian wildfire proved to be a major catalyst in its increasing share price. However, was corrected by the onset of the pandemic soon after. 

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4. Essential Utilities Inc

Backed by renowned analysts and investors, Essential Utilities is undoubtedly one of the best water stocks out there. Primarily, the company is involved in building wastewater treatment infrastructure and related services and is also one of the key stocks in many water-based ETFs. Outperforming the Dow Jones Industrial Average over the course of the past five years, it has managed to give investors lucrative returns up to 70% making it one of the sure-shot bets on this list.

5. York Water Co

Having slumped over the due course of last year due to unprecedented pandemic restrictions, York Water Co has managed to spring its way back to the top recording incremental revenues of $14.26 million in its most recent quarter. It is yet another eye-catching stock that is backed by major hedge funds in the U.S. as well as overseas. Labeled as America’s oldest listed water utility stock, an investment in York Water Company can accrue guaranteed dividends and even sizeable returns given its rock-solid revenues over the quarters.

6. First Trust Water ETF

Being one of the couple ETFs on this list, First Trust Water tracks all major players in the water and utility sector including Advanced Drainage Systems Inc, IDEXX Labs, and many more multi-bagger stocks. The reason why this ETF has caught the eye of investors is because of its stable and steady growth rate over the due course of the pandemic. Up from $60 per share last year to the low $70s per share presently, the ETF has recorded a 3 year daily total return of about 16%.

7. Evoqua Water Technologies Corporation

Evoqua is a global leader in aerobic and anaerobic wastewater treatment, disinfection systems, and water filtration. Having a global presence in over 10 countries, the company has always been of one the key players in the market. Labeled as a volatile stock, Evoqua has seen its revenues fall by a margin of 6.9% year on year in the first quarter of 2021 yet holds firm its position in the water and utility sector.

8. Primo Water Corporation 

Primo Water Corporation is yet another company engaged in the provision of bottled water delivery and water filtration-related services across Europe and North America. Named among the top picks of numerous funds across the USA, Primo Water Corporation remains to be a highly undervalued stock as suggested by industry experts. In line with its debt and liquidity, it is a sure-shot investment if you’re a risk-averse investor.

9. Invesco Water Resources ETF

Incorporated in 2005, Invesco Water Resources ETF or more commonly referred to as PHO is a fund that targets the leading American water-related stocks across the NASDAQ OMX Water Index. With assets under management of $1.4 billion, the fund has proved to be a key component in the portfolio of numerous investors around the world. Besides, large groups of analysts believe that with an annual dividend yield of 0.38% and rising, the returns may surge by manifolds. 

10. Xylem

Although having established itself as one of the premier water infra corporations, Xylem usually does not pay any dividend – not something you’d want to hear if you’re a risk-averse investor. Presently, most analysts would suggest that the stock is significantly overvalued. However, the high volatility of the stock as compared to the index could prove to be a game-changer. With a net profit of $254 million according to its latest annual release, Xylem remains to be one of the most valued water stocks on Wall Street.

Siddharth Kulkarni
Siddharth is an incoming FMV Analyst and B.Com Hons graduate from Delhi University. Siddharth holds several positions of authority at a college level at various societies namely The Young Entrepreneurs Society and The Hult Prize. He is an enterprising youngster who is passionate about learning and growing as a person with each successive day. He is a hardworking and self-confident individual who possesses zeal and grit and loves to work with details. Being a sportsperson as well as an academic achiever, he love to surround himself with healthy competition.

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