What makes water stocks a good investment?

Water stocks can be attractive investments because they're based on an essential resource with growing demand and limited supply. Many water utilities operate as regulated monopolies with predictable revenue streams, providing stability during economic downturns. Additionally, the urgent need to upgrade aging water infrastructure worldwide is creating substantial growth opportunities for companies in this sector.

What are regulated water utilities?

Regulated water utilities are companies that provide water and wastewater services under government oversight. Their rates and returns are set by public utility commissions, which typically allow them to earn a fair return on infrastructure investments. This regulation generally results in stable, predictable revenue and dividend growth, making these companies potentially less volatile than many other investments.

How does climate change affect water investments?

Climate change is intensifying water scarcity in many regions through droughts, changing precipitation patterns, and rising temperatures. This creates growing demand for companies that provide water conservation, purification, and management solutions. As governments and industries invest more in water security, companies in this portfolio may benefit from increased spending on infrastructure, technology, and services that address these challenges.

What is desalination and why is it important?

Desalination is the process of removing salt from seawater to make it usable for drinking or irrigation. As freshwater becomes scarcer in many regions, desalination technology is becoming increasingly important as a sustainable water source. Companies that develop efficient desalination systems or components, like Energy Recovery (ERII) in this portfolio, may see growing demand as more coastal regions turn to ocean water to meet their needs.

What does "market cap" mean in the stock cards?

Market capitalization (or "market cap") represents the total value of a company's outstanding shares. It's calculated by multiplying the current share price by the total number of shares. Market cap helps you understand a company's size: large-cap companies (typically over $10 billion) may offer more stability, while small-cap companies might present more growth potential but with higher risk. This metric gives you context about each water company's relative size in the market.

15 handpicked stocks

Blue Gold Portfolio

Invest in the world's most essential resource with this carefully curated collection of water-focused companies. Our professional analysts have selected industry leaders managing, purifying, and conserving our planet's most vital commodity.

Han Tan | Market Analyst

Published on June 17

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

American Water Works Company, Inc.

AWK

Current price

$136.07

As the largest publicly traded water and wastewater utility in the United States, it is a cornerstone of American water infrastructure.

Xylem Inc.

XYL

Current price

$147.88

This global water technology provider offers a wide array of solutions in water transport, treatment, testing, and analytics.

Essential Utilities Inc.

WTRG

Current price

$38.82

This holding company operates regulated water and wastewater utilities across several U.S. states, ensuring stable, recurring revenue.

Pentair plc

PNR

Current price

$110.50

Mueller Water Products, Inc.

MWA

Current price

$25.52

California Water Service Group

CWT

Current price

$44.55

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

≈

In 12 months it might be worth:

$1,000.00

+8.35%

≈

About This Group of Stocks

Our Expert Thinking

Water is fundamental to life and industry, making it an investment with enduring demand. These companies span the entire water value chain, from utilities and infrastructure to purification technology. This portfolio offers both defensive stability and growth potential as water scarcity becomes a global challenge.

What You Need to Know

Water investments tend to be less cyclical than many other sectors, offering resilience during economic downturns. This portfolio provides diversified exposure across the water ecosystem, including regulated utilities with steady revenue streams and technology innovators addressing critical water challenges.

Why These Stocks

These companies were selected for their leadership positions across the water industry value chain. Each plays a vital role in water management, from the largest U.S. public water utility to technology providers developing desalination and conservation solutions. They're positioned to benefit from increasing water infrastructure investment.

Group Performance Snapshot

8.35%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 8.35% over the next year.

13 of 15

Stocks Rated Buy by Analysts

13 of 15 assets in this group are rated Buy by professional analysts.

1.4%

Group Growth

This group averaged a 1.4% return last month.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

💧

The Ultimate Necessity Play

Water is the one resource no one can live without. These companies control and manage the infrastructure behind this eternal necessity, potentially providing stability other sectors can't match.

🌊

Riding the $1 Trillion Wave

Global water infrastructure needs massive investment—estimated at over $1 trillion in the US alone. These companies are positioned to benefit as governments worldwide prioritize water system upgrades.

🛡️

Your Portfolio's Defensive Shield

Water utilities often show resilience during market downturns. Their regulated, steady income streams and essential service status can provide valuable stability when other stocks are sinking.

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