It’s an asset and resource that we use everyday and therefore, we become desensitized to its importance. But water really is the golden ticket for the future of global societies and economies. Life on this planet cannot exist without it. And therefore, its management and stewardship are incredibly critical. By logical deduction, investors jittery about present market dynamics should consider the best water stocks to buy.

Relevance doesn’t guarantee upside, let me just be clear about that point. Water-related enterprises are generally safe not necessarily because they will turn you into the next Warren Buffett. Rather, the underlying industries enjoy a pertinence that will never fade. Indeed, with global population growth and competition for resources, the best water stocks benefit from a higher probability of market success.

Further, water utilities feature heavy regulation. Not just anyone can show up and start a resource infrastructure business – that’s just not how this works. With that in mind, below are enticing ideas for best water stocks.

American Water Works (AWK)

One of the top names among the best water stocks, American Water Works (NYSE:AWK) falls under the regulated utilities space. It offers water and wastewater services to approximately 1,700 communities in 14 states. In total, the company serves about 3.5 million active customers. It’s consistently profitable although to be fair, it doesn’t always hit its projected target for earnings per share.

Nevertheless, the company benefits from a permanently relevant narrative; after all, water is the most precious resource we have. Right now, shares are trading hands at 29.34X trailing-year revenue. That’s a noticeable premium compared to the prior year’s average multiple of nearly 26X.

However, context matters. Analysts are modeling EPS to reach $5.25 in fiscal 2024. If so, that would imply an expansion of 7.14% from last year’s print of $4.90. In the following year, EPS could rise to $5.66, with a high-side view of 7.81%.

Just as well, the utility offers a forward dividend yield of 2.13%. The payout ratio is moderately elevated though still reasonable at 58.93%. Therefore, it makes a solid candidate for best water stocks.

Essential Utilities (WTRG)

Another top player in the regulated utilities space, Essential Utilities (NYSE:WTRG) provides water and wastewater services. It also provides natural gas in select markets. Per its public profile, Essential serves 5.5 million residential customers covering the full spectrum: residential, commercial, industrial and other utility customers. It’s a consistently profitable enterprise, although again, it doesn’t always hit its EPS targets.

Investors interested in the best water stocks may appreciate WTRG for its valuation. Right now, shares trade hands at 19.5X trailing-year earnings. That’s actually a bit lower than the prior year’s average metric of 20.06X. Presently, the forward multiple stands at 20.08X.

For fiscal 2024, analysts are modeling EPS to hit $2.07. If so, that would imply a growth rate of 11.29% from the prior year’s haul of $1.86. In the following year, earnings could march up again to $2.14. The high-side view calls for $2.20.

Another element that works in favor of WTRG stock is the forward yield, which stands at 3.27%. With an acceptable payout ratio of 60.22%, the implied yield sustainability makes Essential one of the best water stocks to consider.

Global Water Resources (GWRS)

Based in Phoenix, Arizona, Global Water Resources (NASDAQ:GWRS) is a water resource management firm. It owns, operates and manages regulated water, wastewater and recycle water systems. Its coverage is more limited than other ideas among the best water stocks, primarily covering metropolitan Phoenix and Tucson. It serves about 82,000 people in approximately 32,000 homes.

That doesn’t sound like much but context matters. Global features a market capitalization of less than $295 million at time of writing. Yes, that makes GWRS stock subject to volatility. However, it also has the potential to rocket higher. Also, like its peers, Global is consistently profitable. In the past year, it generated EPS of 7 cents (beating the consensus view of 6 cents).

Of course, nothing is for free. While GWRS could fly higher thanks to its diminutive nature, it carries a rich premium: 45.79X trailing-year earnings and 41.84X forward earnings. However, it’s also fair to point out that analysts are modeling for EPS to rise 7.7% to 28 cents this year. In the next, EPS could move up again to 31 cents.

For the risk, investors can enjoy a forward yield of 2.53%. Overall, it’s a solid idea.

On the date of publication, Josh Enomoto 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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.