How to Invest in Water Stocks

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Contributor, Benzinga
August 3, 2023

Water is one of the most-consumed commodities on the planet. It’s widely used for drinking, cleaning, agriculture, cooking and other daily needs. Despite huge demand, water remains incredibly affordable at less than $0.01 per gallon. Water companies have recognized the scope of this industry and can offer you an exciting investment opportunity. 

Consider investing in water stocks to earn profits and make a positive impact on the world.  

How to Buy Water Stock

Here’s how to add water stocks to your portfolio in just a few steps.

Pick a Brokerage

Online brokers can help you find and trade stocks at the click of a button. These platforms give you access to professional tools to improve your trading strategy. You can also use custom filters to view a stock screener. For instance, set the price range for stocks below $5 to show you the best penny stocks.

Decide How Many Shares You Want

Depending on your financial goals, you can choose to invest in water stocks that meet your needs. Once you’ve decided on the water company you prefer to invest in, you can determine the total number of stocks you want to buy. Research the stock data to find financial trends to help you pick the right time to buy and sell shares. You can also go through the annual and quarterly financial reports of the water stocks to gain trading insights before you invest.

Choose Your Order Type

Based on your trading preference, you can choose a specific order type to buy and sell shares. These orders can give you the advantage over market volatility during intraday trading sessions. Here’s a rundown of the most frequently used order types.

  • Bid: You can assign a specific price at which you are willing to purchase those shares if you want to buy shares of stock. Once you set the bid price for a stock, the trade will take place only when the online broker finds a seller who is willing to sell shares at that bid price. In case the broker can not find a seller for your bid price, your order will not be complete.
  • Ask: You can assign a specific price at which you are willing to sell those shares if you want to sell shares of a stock you own. Once you set the ask price for a stock, the trade will take place only when the online broker finds a buyer willing to buy at that ask price. Your order will not be completed if the broker is unable to find a buyer for the ask price.
  • Spread: The spread is the difference between the bid price and the ask price of a stock. If the bid price of a stock is $30 and the ask price is $30.05, the spread is $0.05.
  • Limit Order: You can set a limit order to buy or sell shares at a specific price. Let’s say the stock quote of Northwest Pipe Company (NASDAQ: NWPX) is $23. You can set the buy limit order for $22 and the trade will be executed only when the stock quote falls below $23 and reaches $22. You can also set the sell limit order for $24 and the trade will execute only when the stock price reaches $24.
  • Market Order: You can set a market order to buy or sell shares for the price of the stock quote. Market orders are riskier options to trade as it may leave room for miscalculations. There may be minute differences in the stock quote by the time your order gets filled.
  • Stop-Loss Order: A stop-loss order can be put in place to avoid extensive losses from selling your shares. Setting a stop-loss will keep the trade inactive until the stock quote drops below a certain price. For example, if you bought 100 shares of Northwest Pipe Company at $23, you can assign a stop-loss order at $22. When the stock quote of Northwest Pipe Company falls below $22, the order will automatically turn into a market order and get sold.
  • Stop-Limit Order: The stop-limit order combines the features of stop-loss and a limit order. You have to set 2 values for a stop-limit order. You can set the stop price and the limit price. Let’s say you bought 100 shares of Northwest Pipe Company at $23. You can set the stop value at $22 and the limit value at $21. If the stock quote of Northwest Pipe Company falls below $22, the order will turn into a sell order with a limit order of $21. This means your shares will not be sold for a lower price than $21.

Execute Your Trade

Once you are clear on the number of shares you want to buy or sell, you can execute the order to have it fulfilled. Market orders take the least time to execute.

Best Online Stock Brokers

Invest in water stocks today with Benzinga's top brokerage accounts below.

Water Stock History

Water is consumed by billions of people every day. It is a basic human right and water companies are making it possible for people to have daily access to clean water. 

Founded in 1816, The York Water Company (NASDAQ: YORW) is the oldest investor-owned water utility in the U.S. It’s also the longest dividend-yielding stock in America. The company hasn’t missed a dividend payment in 204 years. 

The diverse use of water in domestic and industrial applications is a driving factor behind the spike in the valuation of water and water-related companies. 

American States Water Company (NYSE: AWR) provides water services to 261,000 customer locations in the U.S. 

The 2020 revenues were $988 million and it has a 52-week range from $7.32 to $14.58.

Pros of Buying Water Stock

Take a look at some of the benefits of investing in water stocks. 

1. Water Stocks OfferPpromising Earnings Per Share 

The increasing demand for water has helped many water stocks to grow past their expectations over the years. The Toro Co. (NYSE: TTC) is a company that provides irrigation systems and its earnings per share (EPS) is expected to grow by 12% per year. Pentair (NYSE: PNR), a company that delivers water filtration systems is expected to grow by 10% per year.     

2.  Water Stocks Have a High Dividend Yield

Water stocks are a good investment for buy-and-hold strategies. Many of these companies reward their shareholders with regular dividends. Consolidated Water Company (NASDAQ: CWCO) has 20 seawater desalination plants in 8 countries. It has an annual dividend yield of 2.15%, making it 1 of the best stocks under $20. American Water Works Company (NYSE: AWK) has an annual dividend yield of 1.75%.  

3. Water Stocks are Sustainable Investments

Water is an essential commodity for people. Unlike gold and oil, water is comparatively inexpensive and less volatile. The low price of water and regular revenue from global sales makes it a cash-rich industry. It helps many water companies stay afloat during inflation and economic crises.        

Cons to Buying Water Stock

Take a look at some of the drawbacks of investing in water stocks. 

1. Water Scarcity is a Real Concern 

Although the Earth is made up of 71% water, it only has about 1% of fresh water. The environmental effects of climate change have made the situation worse. The United Nations World Water Development has estimated that close to 2.2 billion people do not have access to clean drinking water. Because of this growing concern, water companies find it a challenge to fulfill large volumes of supply needs. 

2. Water Stocks Have to Undergo Stern Environmental Regulations 

The price and availability of water can vary from region to region. Governments and natural resource institutions can enforce specific guidelines for water distribution and water-related infrastructure. Minor changes to these environmental stipulations can majorly tilt the price of the water stock overnight.  

3. Water Infrastructure is Decaying in the U.S.

Every year, it’s estimated that 6 tons of water are wasted through leaking pipes and poor infrastructure. Recently, the water system in the U.S. was given a D+ grade by the American Society of Civil Engineers (ASCE). The ASCE has speculated that the U.S. government must spend close to $4.5 trillion to fix the degrading water infrastructure.  

Invest in Water Stocks for a Steady Stream of Income

Regular dividends and the growing EPS estimates of water stocks can be alluring to you as an investor. Diversifying your portfolio with water stocks that yield good dividends consistently can become a stable source of income for you in the long run.

Frequently Asked Questions


Is it smart to invest in water?


Investing in water is becoming increasingly popular as global water scarcity and pollution become more severe. Many companies have developed innovative technologies, products, and services that are helping to improve the quality of our drinking water and ensure its availability into the future.


What is the largest water ETF?


The largest water ETF is the Invesco Water Resources ETF (PHO). This fund invests in global stocks of companies in the water industry. It has a portfolio of over 100 different stocks, including those of utilities, engineering firms, equipment providers and other water-related businesses.


Is water traded on the stock market?


In 2020, water became a new commodity traded on Wall Street alongside oil, gold, and other resources through futures contracts.