Best Water Stocks and ETFs: What drives the world economic machine? It can be argued that this is something that comes out of your kitchen faucet. As one of the most widely used and scarce commodities in the world, water is essential not only for life but also for various industries. (Best Water Stocks and ETFs)
Agriculture, beverages, and even power generation depend on the free flow of water. Investing in the water now does not mean you have to store Aquafina bottles in your basement. Instead, investors can buy shares of companies involved in water resources, purification, and distribution, which come from the utilities or consumer staples sectors.
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If you are looking for increased diversification, an exchange-traded fund holding multiple water-related stocks would also be a great alternative. Here is a list of the Best Water Stocks and ETFs to buy in 2022. (Best Water Stocks and ETFs)
Best Water Stocks and ETFs to Buy
Here Are The 7 Best Water Stocks and ETFs to Buy
Here Are The 7 Best Water Stocks and ETFs to Buy:
Essential Utilities (Ticker: WTRG)
Best Water Stocks and ETFs: WTRG is a utility company operating in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, and Virginia. The company primarily provides drinking water and wastewater treatment infrastructure. Originally known as Aqua America, the company grew through more than 300 mergers and acquisitions between 1993 and 2013.
Revenue and net income in 2021 increased by 28.4% and 51.5% respectively compared to 2020, showing strong growth. Operations money also rose by about 27%, and by 2022 WTRG will be in a strong financial position. The company’s operating range is 32.1%, which helps keep its base level steady.
The stock has a low beta of 0.65, which reveals only two-thirds of the volatility seen in the broader market. WTRG pays an annual dividend of $ 1.07 for a 2.3% yield. Before the markets open on May 9, WTRG is ready to report earnings for the first quarter, so you’re thinking about buying.
Xylem Inc. (XYL)
Best Water Stocks and ETFs: XYL is one of the few water companies not in the utility industry. Instead, it sits in the industrial sector, designing, manufacturing, and servicing various technological products used in the water and sewage industry. Its divisions include water infrastructure, measurement, and control systems.
Notable products include pumps, valves, controls, meters, and leak detection equipment. XYL has a strong economic trench, establishing itself as a primary manufacturer and supplier through an extensive network of direct sales, resellers, distributors, and third-party service providers.
Unfortunately, the company was hit hard by COVID-19, with quarterly earnings and revenues down 4% and 22%, respectively, in the fourth quarter of 2021 and the same quarter a year earlier. Despite this, the company still has $ 1.35 billion in cash balance in the most recent quarter and manages to pay a 1.5% dividend.
American Water Works Co. Inc. (AWK)
Best Water Stocks and ETFs: With a market cap of close to $ 29 billion, AWK is the largest water utility shareholder in the U.S. to complete two dozen acquisitions in 2021 alone, and the company continues to grow and expand its infrastructure, services, and areas.
The company also spends generously on capital projects to upgrade its infrastructure to maintain high-quality services. Recently, AWK announced a $ 3.4 million upgrade to its aging water pipes in Pennsylvania.
In the fourth quarter of 2021, AWK recorded a 3% increase in revenue, which surpassed analyst ratings and expectations for the utility sector. At the beginning of 2022, AWK excluded its subsidiaries in New York and Michigan.
If you want to buy, make sure you keep track of AWK’s performance and maintenance performance ratio, which reflects how well the company controls costs. The lowest figure was at best, with AWK at 34.1% in 2021, up from 34.3% in 2020 and 34.5% in 2019.
Primo Water Corporation (PRMW)
Best Water Stocks and ETFs: PRMW Earth 2O supplies water to consumers through brands including Crystal Springs, Sierra Springs, Mountain Fence and Deep Rock Bottled Water, Filtering Equipment, and Coffee and Water Dispensers.
PRMW recently announced its full-year results in February, with revenue up 6% to $ 2.07 billion from $ 1.95 billion, while pre-adjusted income or EBITDA, or EBITDA, increased 5% from $ 362 million to $ 380 million. The company repurchased about 2.6 million shares for $ 44 million.
The administration has issued guidelines for 2022 stating that it expects revenue growth of 9% to 10% and that EBITDA has adjusted from $ 410 million to $ 420 million. If you are interested to see if PRMW can provide this guidance, the first quarter revenue call of 2022 is scheduled for May 12 before the market opens.
Invesco S&P Global Water Index ETF (CGW)
Best Water Stocks and ETFs: Investors who want a more passive, hands-on approach to investing in water stocks can skip the previous tickers and buy CGW instead. The ETF holds shares in over 50 global companies involved in the water industry.
The ETF holds about 50% of mid-cap stocks that offer a mix of value and growth characteristics. American Water Works, Salem, Violet Environmental SA (VEOEY), Essential Utilities, and Severn Trend PLC (SVT) are the top five holdings. ETFs have a global focus, accounting for 55.9% of U.S. finance.
The U.K. In 17.3%; 6.6% in Switzerland; 5.6% in France; And about 3% or less in Canada, Japan, the Netherlands, Italy, and Brazil. CGW pays 30% SEC yield 1% with a cost ratio of 0.57%.
First Hope Water ETF (FIW)
Best Water Stocks and ETFs: FIW monitors the ISE Clean Edge Water Index. This market-cap-weighted index is made up of 36 global water industry companies that focus mainly on the drinking water and wastewater segments.
Significantly, the index imposes restrictions on market capitalization, liquidity, and weighting, ensuring that only the best stocks in the industry are represented by their market cap.
This gives FIW a semi-proactive approach compared to CGW, due to its strict criteria for eligible stocks. Holdings will be rebalanced for half a year. The ETF weighs heavily on mid-caps, with an average market value of $ 5.3 billion.
Significant key players include American Water Works, ECOM (ACM), and Essential Utilities. FIW pays 0.5% of the 30-day SEC yield and charges a cost rate of 0.54%. ETFs accounted for 18-%, 15.8%, and 14.3% of three-, five- and 10-year backward returns, respectively.
Invesco Water Resources ETF (PHO)
Best Water Stocks and ETFs: Unlike CGW, PHO is a NASDAQ OMX U.S. Monitors the Water Index, focusing on the shares of 38 US-listed companies involved in conserving or purifying water for commercial and consumer use. Once again, American Water Works holds the largest holdings at 8.7%, according to Roper Technologies Inc. (ROP), Ecolab Inc.
(ECL), Danaher Corp. (DHR) and Xylem are the next big weights. Industrial stocks dominate the PHO, accounting for almost 57% of ETFs, followed by the next largest sector waiting applications at 19.9%, followed by health care at 11.9%.
The returns on ETFs for the next three-, five- and 10-year seasons are 17.3%, 16.5%, and 12%, respectively. PHO pays 0.4% of the 30-day SEC yield and the cost ratio is 0.6%. The ETF has attracted $ 1.7 billion in assets under management since its inception.
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