By Terel Miles on April 10, 2023

9 Best Water Stocks To Buy Now (April 2023)

Water is essential to human life, thus making water stocks a viable investment case.

After all, the human body consists of approximately 60% water.

Brazil, Russia, The United States, Canada and China rank among the top 5 countries in the world for fresh renewable water per cubic kilometer.

According to the World Health Organization, ⅓ people around the world do not have access to potable drinking water and adequate sanitization systems (WHO, 2019).

As climate change drives global inequalities and resource scarcities, draughts and limited access to fresh water may continue to accelerate.

With water resources remaining scarce, climate change accelerating and water filtration technologies advancing, now could be a great time to consider water stocks as an investment.

Below, we will present the 11 Best Water Stocks to buy now in 2023!

Table of Contents

Best Water Stocks To Buy for 2023

1. American Water Works Company (NYSE: AWK)

Ticker: AWK
Dividend Yield: 1.73%
10-Yr Dividend Growth Rate: 10.25%
Payout Frequency: Quarterly
Payout Ratio: 56.93%
Market Cap: $29.36 Billion

American Water Works Company is a public utility company providing water and wastewater services across the United States.

The company operates in 14 states serving more than 3.4 million customers. American Water Works employs more than 6,400 people and has approximately $27.78 billion in total assets.

In 2022, the company had annual revenues of $3.79 Billion.

With a current dividend yield of 1.73%, American Water Works can be a great water stock for dividend growth investors.

2. Essentials Utilities (NYSE: WTRG)

Ticker: WTRG
Dividend Yield: 2.55%
10-Yr Dividend Growth Rate: 7.51%
Payout Frequency: Quarterly
Payout Ratio: 62.73%
Market Cap: $11.79 Billion

Essentials Utilities is an American public utilities company providing water and wastewater infrastructure in the United States.

The company operates primarily in Texas, Virginia, Ohio, Pennsylvania, New Jersey, North Carolina, Indiana, and Illinois. Essential Utilities employs more than 3,200 people and has approximately $15.71 billion in total assets.

In 2022, the company had annual revenues of $2.28 Billion.

Essential Utilities closed three acquisitions in 2022, and grew EPS by 6% year-over-year.

With a dividend yield of 2.55% and a payout ratio of 62.73%, Essential Utilities is an attractive water stock to buy for the long term.

3. York Water Co (NASDAQ: YORW)

Ticker: YORW
Dividend Yield: 1.75%
10-Yr Dividend Growth Rate: 3.73%
Payout Frequency: Quarterly
Payout Ratio: 56.24%
Market Cap: $664 Million

York Water Co is an investor-owned public utility company providing water to residential, commercial and industrial customers.

Based in Pennsylvania, the company was founded more than two centuries ago. York Water Co supplies water to more than 75,000 customers covering 54 municipalities within York, Adams, and Franklin Counties, Pennsylvania.

In 2022, the company had annual revenues of $60.06 Million.

With a current dividend yield of 1.75%, York Water Co has room to grow its dividend in the long term. However, investors should consider its balance sheet as a concern when compared to its competitors.

4. American States Water Company (NYSE: AWR)

Ticker: AWR
Dividend Yield: 1.72%
10-Yr Dividend Growth Rate: 9.92%
Payout Frequency: Quarterly
Payout Ratio: 72.27%
Market Cap: $3.43 Billion

American States Water Company is an American public water and electric utility holding company.

Through its publicly branded subsidiaries, American States Water has more than 263,000 water customers in Northern and Southern California. Its electric utility subsidiary, Bear Valley Electric Service, distributes electricity to approximately 24,700 customers.

The company has also benefited from 50 years of privatized contracts with the U.S. government, including wastewater collection and treatment facilities on 11 military bases.

In 2022, the company had annual revenues of $492 Million.

American States Water Company currently offers an attractive dividend yield of 1.72%.

5. Middlesex Water Company (NASDAQ: MSEX)

Ticker: MSEX
Dividend Yield: 1.54%
10-Yr Dividend Growth Rate: 7.59%
Payout Frequency: Quarterly
Payout Ratio: 49.48%
Market Cap: $1.41 Billion

Middlesex Water Company is a public utility company providing water and wastewater treatment services across the state of New Jersey.

The company was founded over a century ago, providing regulated and unregulated water to its residential and commercial customers. Middlesex Water Company has approximately $1.07 billion in total assets.

In 2022, the company had annual revenues of $162 Million.

Over the last 5 years, Middlesex Water Company has returned more than 100% in capital gains to its shareholders. With a high single-digit dividend growth rate, Middlesex Water Company has potential for increased dividend growth and shareholder returns.

6. Xylem (NYSE: XYL)

Ticker: XYL
Dividend Yield: 1.32%
10-Yr Dividend Growth Rate: 9.35%
Payout Frequency: Quarterly
Payout Ratio: 61.22%
Market Cap: $18.34 Billion

Xylem is a public utility and water technology company that operates in more than 150 countries.

Their services apply to a number of different market sectors including; real estate, agriculture, commercial buildings, construction, boats, pools, pharmaceuticals and more.

They employ more than 17,000 people worldwide and have approximately $7.95 billion in total assets.

In 2022, the company had annual revenues of $5.52 Billion.

With a current dividend yield of 1.32%, Xylem’s diversified business model and strong dividend growth makes it among the best water stocks to buy in 2023.

7. California Water Service Group (NYSE: CWT)

Ticker: CWT
Dividend Yield: 1.72%
10-Yr Dividend Growth Rate: 4.27%
Payout Frequency: Quarterly
Payout Ratio: 56.50%
Market Cap: $3.34 Billion

California Water Service Group is a public utility company providing water and wastewater services across the United States.

The company supplies water to more than 2 million customers through its subsidiaries California Water Service, Hawaii Water Service, New Mexico Water Service, Texas Water Service and Washington Water Service.

California Water Service Group employs more than 1,200 people and has approximately $3.85 billion in total assets.

In 2022, the company had annual revenues of $846 Million.

With a current dividend yield of 1.72%, California Water Service Group ranks among the best water stocks for shareholder returns.

8. Primo Water Corporation (NYSE: PRMW)

Ticker: PRMW
Dividend Yield: 2.14%
10-Yr Dividend Growth Rate: 11.00%
Payout Frequency: Quarterly
Payout Ratio: 155.56%
Market Cap: $29.36 Billion

Primo Water Corporation is an American-Canadian water company providing water purification, water appliances and water technology services across North America and Europe.

The company employs more than 10,000 people and has approximately $3.67 billion in total assets.

In 2022, the company had annual revenues of $2.21 Billion.

With a current dividend yield of 2.11% and strong cash flow from operations, Primo Water may be able to sustain its dividend despite its high payout ratio.

9. SJW Group (NYSE: SJW)

Ticker: SJW
Dividend Yield: 1.91%
10-Yr Dividend Growth Rate: 7.21%
Payout Frequency: Quarterly
Payout Ratio: 59.26%
Market Cap: $2.45 Billion

SJW Group is a public utility water distribution and wholesale company. They primarily provide their services throughout the United States.

The company’s subsidiaries include; San Jose Water Company, Connecticut Water Company, Maine Water Company, and SJWTX.

SJW Group employs more than 750 people and has approximately $3.63 billion in total assets.

In 2022, the company had annual revenues of $621 Million.

With a current dividend yield of 1.91% and strong EPS growth, SJW Group’s margins look a lot more compelling than its competitors.

Best Water Stocks: Is Now The Time To Buy?

Water stocks are largely utility based companies with many of them being around for well over a century. However, they have largely flown under investors’ radar in recent years.

With new technological advancements, investors are often focused on sectors like artificial intelligence stocks, green energy stocks, and semiconductor stocks.

But this could be a big mistake, because nearly all water based utility stocks have outperformed the S&P 500 over the last decade.

Water stocks can also be viewed as recession-proof stocks when the economy goes into a rut.

Now that we know water is a scarce commodity and basic human need for survival, you might want to consider these best water stocks as an addition to your investment portfolio.

Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.