As A Water Crisis Threatens The Globe, These 3 Dividend Paying Water Utilities Could See Their Market Caps Balloon
The Invesco Water Resources ETF (NASDAQ:PHO) is down approximately 21% year-to-date, compared to the S&P 500 which is down roughly 22% year-to-date.
Although water utilities have fallen in line with the market, they still make an attractive investment as water is one of the most important resources in the world.
The World Health Organization reported 884 million people do not have access to safe drinking water and according to UN-Water more than 2.3 billion people live in water-stressed countries.
A global water crisis could continue to worsen with scorching droughts and climate change, which could cause 700 million people to be displaced by intense water scarcity by 2030, the Global Water Institute reported.
Here are three water utility stocks to consider.
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Essential Utilities Inc. (NYSE:WTRG) is offering a dividend yield of 2.62% or $1.15 per share annually, making quarterly payments, with a strong track record of increasing its dividends for 16 consecutive years.
Essential Utilities is a Pennsylvania-based holding company for U.S. water, wastewater and natural gas distribution utilities.
“Our work continues to produce solid financial performance for the first half of the year, with the expectation that we will meet the 5%-7% earnings growth guidance again this year,” said Essential Chairman and CEO Christopher Franklin.
In the second quarter of 2022, Essential Utilities' revenues for the quarter were $448.8 million, an increase of 13.0% compared to $397.0 million in the second quarter of 2021.
Aris Water Solutions Inc. (NYSE:ARIS) is offering a dividend yield of 2.20% or 36 cents per share annually, through quarterly payments, with an infrequent track record of increasing its dividend.
Aris Water Solutions is an environmental infrastructure and solutions company that helps customers reduce their water and carbon footprints.
Due to cost headwinds and customer scheduling delays, Aris Water Solutions saw a net income for the second quarter of 2022 of $4 million, which decreased by 11% compared to the same period last year. On the bright side, Aris Water reported approximately 1.2 million barrels of water per day of total volumes handled, up approximately 34% from 924,000 barrels of water per day for the second quarter of 2021.
American Water Works Company Inc (NYSE:AWK) is offering a dividend yield of 1.90% or $2.62 per share annually, using quarterly payments, with a decent track record of increasing its dividends for three consecutive years.
American Water Works is the largest investor-owned U.S. water and wastewater utility, providing water and wastewater services to residential, commercial and industrial customers and operates predominantly in regulated markets.
American Water Works beat its earnings consensus three quarters straight and has issued its 2022 earnings per share guidance range of $4.39 to $4.49 on a weather-normalized basis. The firm also issues 2023 earnings guidance range of $4.72 to $4.82 per share, with a long-term dividend growth expectation of 7% to 9%, narrowed to align with their long-term earnings per share compounded annual growth rate.
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