“Water utility stocks…boring,” you say? Not so fast.
Drought conditions in the west have brought the demand for water to crisis levels. Farmers in western states, already hurting from last summer’s drought and historic wildfires, will feel the squeeze even tighter this year. And some rural communities in California may completely run out of water by this May.
It just underscores why I’m bullish on water utility stocks for the long term. Fresh water is among life’s indispensable commodities. It’s a product that literally every living being needs, and only certain companies have the infrastructure to deliver it to consumers. Hmm…suddenly, water utility stocks don’t sound so boring.
A well-managed water utility is one of the safest investments you can make—as long as you don’t overpay. Water companies typically trade at higher valuations than industrial stocks, reflecting the water utes’ superior defensive characteristics.
My favored water utility stocks also have a long history of increasing dividends, helping to insulate your portfolio from unexpected shock…while providing much-needed income that younger folks can reinvest to compound their wealth, or that investors closer to retirement can use to support themselves and their families.
Now on to three of the most compelling water utility stocks.