Reasons to Add American States Water AWR to Your Portfolio October 10, 2023

The company offers drinking water and wastewater treatment infrastructure and services, serving about 5 million people across 10 states under its Aqua and Peoples brands. Essential Utilities reaffirmed its non-GAAP EPS guidance for 2020. The company expects the number to be at the top end of the guidance range of $1.53-$1.58. Investing in water stocks and ETFs is one of the safest bets in the volatile markets of today.

As the demand for drinking water increases worldwide, so will the need for desalination. According to Adroit Market Research, the global water desalination market is expected to surpass $27 billion by 2025. Smart meters have data loggers, sensors, communication devices and data management systems that transfer information on demand. The focus is on digitizing water-metering systems because they help avoid water leaks and loss. Over the next few years, there will be an increased opportunity to invest in technology related to water metering. That 11% of revenue does represent about $2.4 billion, more than that of most of the pure water plays.

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We are not contractually obligated in any way to offer positive or recommendatory reviews of their services. For example, you can invest in the Invesco S&P Global Water Index ETF (CGW), and instantly invest in many different water utility, technology, and bottling companies. review manias, panics, and crashes With growing concerns about the cleanliness and purity of tap water, people are increasingly turning to bottled water for consumption. All that water has to come from somewhere, so utility companies, well water businesses, and even pipe and infrastructure firms are booming.

What you need to invest in water stocks

Governments need new technologies to extract, purify, discover and deliver water. Barclays in a report identified that as the world moves toward “smart cities,” investment opportunities in waste and water management areas like leakage detection, predictive maintenance and planning will grow. The company has invested and will continue to invest to make essential upgrades and maintenance of aging assets in the long term. Environmental Protection Agency, investments of $473 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, to meet demand over the next 20 years. A delay in repair could cause frequent disruptions in the 24×7 supply of potable water and sewer services.

  • On the other hand, guessing where the bottom is can be a difficult job and is not recommended for novice traders.
  • Examine the management team, overall company culture, values, and processes.
  • Water isn’t the most glamorous investment, but it is hard to think of a commodity more critical to society.
  • When the managers do deviate, it’s usually to smaller, growth-oriented companies, which pulls the fund into the mid-cap growth style box.
  • It’s widely used for drinking, cleaning, agriculture, cooking and other daily needs.

Although these may be seen as a safe haven for some, all stocks still come with risks, so read our risk-management guide for information on how to protect your capital. You can buy shares of companies that produce water-related equipment, such as pumps, meters and filters, invest in water utilities and environmental companies that clean, purify or distribute water. Another major benefit of water utilities is their abundant dividends. That is why investors should always pay close attention to stock dividend policies and calculate the dividend yield to identify whether a stock is overvalued or not. Water is essential for every country in the world, but everyone manages it differently.

These returns cover a period from January 1, 1988 through September 4, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return.

American States Water

Keeping an eye on water indices might help you improve your trading results even when you aren’t actively investing in them. Indices can be used as a measure of the health of the industry and indicators of the stock market. As mentioned above, high liquidity is important in the world of stock trading as it lowers trading fees and provides fxcm broker review a basis for market moves. US stock markets offer the most liquidity and are preferred by many investors. Where there are problems and scarcity, companies that are involved in solving these problems represent great investment opportunities. Demand for fresh water is increasing as the population grows and living standards rise.

How to Invest in Water Stocks

Like other commodities, such as oil and gold, water assets can add significant diversification to any portfolio. It has five water service subsidiaries, which you’ll find in California, Hawaii, New Mexico, Texas and Washington. Advances in these areas have helped American Water Works grow. Its track record and size make it one of the best water companies to invest in.

Invest in individual water stocks

Ecolab notes that it derives roughly 70% of sales from water-related businesses, so it’s a juggernaut in the water-stock world. The company’s Global Industrial unit, its largest division, provides a majority of the company’s $14 billion annual revenues and is almost entirely water focused. We think nothing of turning on the sprinkler to water the grass, filling the cooler with ice or running the dishwasher. It’s big business and investing in water is a long-term opportunity. In fact, many fund managers refer to water, which humans need to survive and businesses to thrive, as the new oil.

At some point, someone probably taught you that water is a renewable resource, and technically, that’s true. However, the rise of industrialization, agriculture, and pollution across the globe has led to scarcity. Water testing includes physical, chemical and microbiological testing to meet the demands for the consumption of bacteria- and liteforex review chemical-free water. Water metering looks at the volume of water residential and commercial buildings use. Investors can choose U.S.-focused or global portfolios, managed either actively or passively. If your broker doesn’t waive the load, you might want to consider the ETFs or the no-load water-themed mutual fund on this list instead.

The company offers carbon and resin solutions to remove these harmful chemicals from drinking water supplies. At first glance, it seems like investing in water is an absolute no-brainer, but there are some risks to consider too. They might be a good counterbalance in your investment strategy, mainly if your portfolio relies heavily on more speculative investments. Determine whether the company you’re considering is capable of rethinking old norms. As the world changes and grows, the way we handle water will, too. According to the World Wildlife Fund, 2/3rds of the world’s population will be facing water shortages by 2025.

It owns and operates three wastewater collection systems; eight wastewater collection and treatment systems; and two reservoirs, including Lake Williams and Lake Redman, which hold approximately 2. Global Water Resources stock opened the day at $17.38 after a previous close of $17.35. Global Water Resources is listed on the NASDAQ, has a trailing 12-month revenue of around USD$49.1 million and employs 94 staff.

“Valmont clearly has the wind at its back,” notes Stifel analyst Nathan Jones. And the company is bullish on 2023, thanks in part to a $1.7 billion business backlog. The company rewarded investors earlier this year by boosting the quarterly dividend by 9%. The company is best known for cleaning and sanitation processes that help its hotel, school, laundry and restaurant customers reduce water usage when washing dishes and doing laundry. “It’s my favorite water stock,” says Michael Halloran, an analyst at investment firm Baird.

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