Water is essential to life as we know it, making the case for investors to consider the best water stocks to buy. While a seemingly abundant resource, the reality is that accessible, clean freshwater is becoming increasingly scarce.
Population growth, climate change, pollution, and aging infrastructure all contribute to the challenges and risks facing our water supply. As concerns regarding water scarcity continue to mount, investors are seeking investment opportunities within the water sector. Before the next significant water shortage unfolds, savvy investors are positioning themselves to benefit from the growing demand for water-related solutions.
Now, let’s discover the top water stocks to buy before the next shortage in 2024!
Xylem (XYL)
Xylem (NYSE:XYL) is a global leader in water technology, providing advanced solutions across the water cycle. The company does business in more than 150 countries, and was formed as a spinoff of the water related businesses of ITT Corporation.
Xylem product and service portfolio ranges from water transportation, treatment, testing, and analytics. This diversification makes them the whole package and highly resilient as they can cater to different segments of the water infrastructure value chain. The company’s involvement in cutting-edge technologies like smart metering and wastewater monitoring and treatment positions them well into the future. In FY23, Xylem’s revenue increased 33% YOY to $7.4 billion. Net income skyrocketed 72% YOY to $609 million, or $2.79 per share. President and CEO Matt Pine, has signaled strong demand for their products and services and remains confident in further growth and margin expansion in 2024.
American Water Works (AWK)
American Water Works (NYSE:AWK) is the largest and geographically diverse water and wastewater utility company in the United States. They provide regulated and dependable water services to more than 15 million people across the country.
American Water Works regulated facilities operate in approximately 1,700 communities in 14 U.S. states. This widespread presence grants the company a resilient business model, as demand for water will remain constant regardless of economic conditions. The company has also continued to invest in infrastructure upgrades and expansion projects, while maintaining healthy profit margins. Moreover, the company continues to make notable acquisitions and expand its partnerships to further its market dominance. In FY23, revenue increased 12% YOY to $4.23 billion, with EPS up 9% to $4.90 per share. AWK invested a record $2.7 billion in regulated operations, including the completion of 23 acquisitions across eight states. Management has issued strong guidance for 2024, making AWK one of the top water stocks to buy now.
York Water Co (YORW)
York Water Co (NASDAQ:YORW) holds the crown of being the oldest investor-owned water utility company in the United States. Founded in 1816, the company provides regulated water and wastewater services in Pennsylvania.
First and foremost, York Water boasts a remarkable track record of uninterrupted dividend payments, spanning over two centuries. Yes, you heard that right, and the company just recently declared its 613th dividend payment, believed to be the longest record of consecutive dividends in American history. This alone speaks volumes about the company’s resilience and ability to weather economic storms. Furthermore, their strategic focus on infrastructure investment positions them to address the challenges of aging water systems. In FY23, revenue increased 18% YOY to $71 million. Net earnings increased by 21% to $23.76 million, or $1.66 per share. The company invested $64.6 million in 2023, and plans to invest approximately $42.2 million in 2024 and $46.1 million in 2025.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
