What are the Best Water Stocks for 2025?

What are the Best Water Stocks for 2025?

Water isn’t just essential for life, it is also a defensive yet growing investment theme. Populations are rising, infrastructure is ageing, climate change is straining supply, and regulators are tightening quality standards. Together, these forces create steady demand for companies that deliver, treat, and conserve water. For long-term investors, the best water stocks offer a rare mix of resilience, dividends, and growth.

Why Invest in Water Stocks?

• Essential demand: People, farms, and industries all need water, regardless of market cycles.
• Defensive cash flows: Regulated utilities generate stable revenues and reliable dividends.
• Climate pressure: Droughts and extreme weather make water scarcer, raising both its price and investment urgency .
• Policy momentum: Regulations such as the EPA’s new PFAS limits at 4 parts per trillion for PFOA and PFOS force utilities to spend heavily on testing and treatment .
• Technological growth: Smart meters, desalination, and water-quality solutions provide upside beyond traditional utilities.

Mapping the Water Industry

1. Regulated utilities: Treat and distribute drinking water. Revenues are capped by regulators, but cash flows are predictable.
2. Technology & analytics: Pumps, filtration, smart networks, and chemistry. Benefit from infrastructure upgrades and new quality standards.
3. Desalination & reuse: Niche suppliers serving drought-prone regions.
4. Consumer hydration: Packaged and refillable water brands, a smaller but growing segment.
5. ETFs: Broad exposure to utilities, infrastructure, and tech in one basket.

Best Water Stocks for US Water Utility Companies

American Water Works (NYSE: AWK)

The largest publicly listed US water and wastewater utility, serving 14 million people in 46 states . It is expanding through heavy infrastructure investment and acquisitions, with $40B in planned capex over the next decade. Dividend yield: ~2.3% .

Essential Utilities (NYSE: WTRG)

Formerly Aqua America, now also operating natural gas utilities. Provides water and wastewater to ~5 million people . Dividend yield: ~3.6%.

American States Water (NYSE: AWR)

Runs water, electric, and contracted military services. Known for one of the longest dividend-increase streaks in the US . Dividend yield: ~2.7%.

York Water (NASDAQ: YORW)

Founded in 1816, the oldest investor-owned US utility. Holds the longest uninterrupted dividend record in America . Dividend yield: ~2.9%.

Middlesex Water (NASDAQ: MSEX)

Provides water and wastewater in New Jersey and Delaware. Profits surged nearly 50% in 2024 after rate relief . Dividend yield: ~2.6%.

Leading Water Technology and Analytics Stocks

Xylem (NYSE: XYL)

Global leader in pumps, metering, and advanced treatment. Its $7.5B acquisition of Evoqua in 2023 created a full-stack platform for digital and industrial water solutions . Revenue grew 16% to $8.6B in 2024 .

Veralto (NYSE: VLTO)

Spun off from Danaher in 2023. Owns brands like Hach, ChemTreat, and Trojan, making it a pure water-quality and analytics play. Over half of revenue comes from water .

Pentair (NYSE: PNR)

Focuses on filtration, residential/commercial solutions, and pools. Operates in 30+ countries and recently tightened its focus as a pure-play water company .

Desalination and Reuse

Energy Recovery (NASDAQ: ERII)

Makes PX pressure exchangers that cut energy use in seawater reverse-osmosis plants. Recently extended PX design life to 30 years and announced major Gulf contracts . A niche but direct bet on water scarcity.

Consumer Hydration

Primo Water (NYSE: PRMW)

Provides refill stations, water dispensers, and bottled brands (Poland Spring, Pure Life, Saratoga). Grew revenue 10% in 2023 to $5.2B . Offers a rare pure-play consumer angle, though debt (~$5B) is a risk.

Global Outlook: The Best Water Stocks in the UK, Europe, and Asia

UK and Europe: Regulation Shapes Returns

In the UK, the water sector is fully privatised but tightly regulated by Ofwat, which sets price caps every five years. This means that while listed utilities like Severn Trent, United Utilities, and Pennon Group enjoy predictable revenues, their profits are capped by regulatory reviews. Still, these companies remain attractive for dividend seekers thanks to their stable cash flows and defensive nature.

For example, Severn Trent serves around 8 million customers across the Midlands, United Utilities is the largest listed water and wastewater company in the country and also the biggest corporate landowner in England, while Pennon Group runs South West Water and Bournemouth Water and has historically expanded into unregulated businesses like recycling.

Beyond the UK, European names such as Veolia and Suez in France have built global footprints in water and waste management, providing investors with exposure to a wider set of international markets.

Asia: Growing Demand and Expansion

In Asia, water stocks reflect both rapid urbanisation and government-backed investment in infrastructure. Kurita Water Industries in Japan is a standout, focusing on treatment chemicals and water plant services, with more than one-third of its revenue generated overseas.

In China, companies such as Beijing Enterprises Water Group and China Water Affairs Group are aggressively expanding, building and operating hundreds of treatment facilities across dozens of cities. These firms are also venturing abroad, with projects reaching as far as Europe and Southeast Asia.

The scale of China’s urban growth, coupled with rising concerns about pollution and scarcity, makes these companies key players in addressing the region’s water challenges.ons .

ETFs on Best Water Stocks

If you want broad exposure without choosing individual names, water ETFs are a simple option. Funds such as the Invesco Water Resources ETF (PHO), First Trust Water ETF (FIW), and Invesco Global Water ETF (PIO) focus on US-listed water companies, while the Invesco S&P Global Water Index ETF (CGW) and iShares Global Water UCITS ETF (IH2O) give investors international coverage. These ETFs pool leading utilities, infrastructure firms, and technology providers, offering a one-ticket way to participate in the theme.

Final Take

• For stability and income: AWK, WTRG, AWR, YORW, MSEX.
• For growth from innovation: XYL, VLTO, PNR.
• For scarcity leverage: ERII.
• For a consumer angle: PRMW.
• For simplicity: PHO, FIW, CGW, PIO, IH2O.

Water is a universal need. With both regulated stability and innovation upside, the best water stocks are well positioned to deliver through 2025 and beyond.