What makes water stocks a good investment opportunity?

Water stocks are considered valuable investments because they're tied to an essential resource with increasing scarcity. As global populations grow and climate change affects water supplies, companies that manage, treat, and distribute water face rising demand. These stocks often combine stability (everyone needs water) with growth potential from infrastructure upgrades and new technologies, potentially offering both defensive characteristics during market downturns and long-term appreciation.

What is desalination and why is it important for water stocks?

Desalination is the process of removing salt from seawater to create freshwater. It's becoming increasingly important as traditional freshwater sources face pressure from population growth and climate change. Companies specializing in desalination technology (like ERII and CWCO in this portfolio) are positioned to benefit as more regions turn to oceans for drinking water. While historically expensive, new technologies are making the process more energy-efficient and cost-effective.

What's the difference between regulated and non-regulated water companies?

Regulated water companies (like AWK and WTRG) operate as utilities with government oversight on their rates and returns. They typically offer more stable, predictable earnings and dividends but slower growth. Non-regulated water companies focus on technology, equipment, or services without direct rate regulation. These firms (like XYL and PNR) often have higher growth potential but may experience more volatility. A diversified water portfolio typically includes both types for balance.

How does climate change impact water investments?

Climate change creates both risks and opportunities for water investments. Increasing droughts, flooding, and weather volatility strain existing water systems, requiring more infrastructure spending. This benefits companies providing solutions for water conservation, flood management, and system resilience. Climate-driven water scarcity also increases the value of water rights and makes efficient technologies more essential. Companies in this portfolio are positioned to address these challenges through infrastructure improvements, advanced treatment technologies, and resource management.

15 handpicked stocks

Water Wars Portfolio

Dive into companies transforming how we access, purify, and manage Earth's most precious resource. These carefully selected stocks represent leaders revolutionizing water technology and infrastructure as global demand surges.

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.

Xylem Inc.

XYL

Current price

$148.76

This company is a leading global water technology provider, offering a wide range of products and services for water and wastewater applications.

American Water Works Company, Inc.

AWK

Current price

$135.81

As the largest publicly traded water and wastewater utility company in the U.S., it has extensive operations in regulated markets.

Essential Utilities Inc.

WTRG

Current price

$38.55

This holding company operates regulated water, wastewater, and natural gas utilities, providing essential services to a broad customer base.

California Water Service Group

CWT

Current price

$44.36

Pentair plc

PNR

Current price

$112.38

Energy Recovery Inc

ERII

Current price

$15.81

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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

+46.12%

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About This Group of Stocks

Our Expert Thinking

Water scarcity represents one of the greatest investment opportunities of our time. As climate change and population growth strain limited resources, companies providing water solutions are positioned for sustained growth. This portfolio captures the entire water value chain from utilities to cutting-edge purification technology.

What You Need to Know

This collection offers exposure to a necessity-based sector with defensive characteristics and growth potential. Water stocks tend to be less volatile than broader markets while benefiting from essential infrastructure spending. The aging water systems worldwide require trillions in upgrades over coming decades.

Why These Stocks

Each company was selected for its direct operational involvement in water management, from large utilities with stable regulated returns to specialized technology firms pioneering efficiency solutions. These businesses are uniquely positioned to address the growing imbalance between fixed supply and rising global demand.

Group Performance Snapshot

46.12%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 46.12% over the next year.

14 of 15

Stocks Rated Buy by Analysts

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

4.9% vs 4%

Group Growth vs Bank interest

This group averaged a 4.9% return last month, beating the typical 4% bank rate.

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

💧

Liquid Gold Opportunity

Water is becoming more valuable than oil in many regions. These companies control access to what may become the most profitable commodity of the 21st century.

🌊

Trillion-Dollar Infrastructure Wave

The global water crisis is forcing massive investment in new infrastructure. These companies are first in line for contracts worth trillions over the coming decades.

🛡️

Recession-Resistant Returns

Need water? So does everyone else. These essential service providers offer stability when markets get choppy, with consistent demand regardless of economic conditions.

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