Below is a list of the most popular water stocks. We all know about investing in commodities like oil, gold, and natural gas. But what about water? How do we invest in water stocks? Despite being the most important element on Earth, it’s never at the top of anyone’s investing list. Without it, there would be no life on this planet. One can even argue that it has an unlimited demand with a long list of use cases. That alone should get the attention of investors.
Best Water Stocks 2026
| Symbol | Name |
|---|---|
| AWK | American Water Works |
| WTRG | Essential Utilities |
| XYL | Xylem Inc |
| AWR | American States Water |
| CWCO | Consolidated Water |
| TTEK | Tetra Tech |
| ECL | Ecolab |
| TPL | Texas Pacific Land |
| PRMW | Primo Water |
| FIW | First Trust Water ETF |
How to Invest in Water Stocks
Figuring out you want to invest in water stocks is one thing, but how can you do it? You might not realize it, but many industries rely on water daily. It’s not just something to quench your thirst. Water is used in countless industrial processes and is a major clean and renewable energy source.
There are plenty of stocks and ETFs that focus on water-based companies. This article will discuss how you can invest in water stocks and which industries you want to target.
Remember, at the end of the movie The Big Short? We see what each character does with the fortunes they just made. The movie’s main character, Michael Burry, decides to invest in water. In an interview several years later, Burry said:
“What became clear to me is that food is the way to invest in water stocks. That is, grow food in water-rich areas and transport it for sale in water-poor areas.”
It is an interesting strategy emphasizing how important water is to our civilization. If you need a reason to invest in water, it is that there is a somewhat finite supply with infinite demand.
One day, there will be a time when we no longer rely on oil to operate our vehicles and machinery. There is a chance that the greatest hedge against inflation and currency volatility in the future is a digital asset like Bitcoin, not gold. But there will never be another commodity that can replace our dependence on water to sustain life.
Where there is water, there is food and sustenance. There is plant life and wildlife, and typically a healthy and thriving ecosystem. Water is one of the elements that separates us from other planets. The bull case for investing in water is that it is irreplaceable and helps to maintain life daily.
Ways to Invest in Water
As we mentioned, many industries rely on water to carry out their operations. Some of these are obvious, but some might be a surprise. When looking for water-related stocks, could you consider what sectors you want to invest in? Some ways in which water is used are more noble than others. Here are some of the sectors to look at when investing in water stocks.
Hydroelectric Power
What is hydroelectric power? This is a form of renewable energy production that utilizes the power of moving water. Often, hydroelectric infrastructure is built right into bodies of water like rivers. This allows the machinery to harness the full and natural power of the water’s energy. Hydroelectric power is one of the world’s largest clean energy and supply sources. According to National Geographic, more than 70% of the world’s renewable power is supplied by hydroelectric power, so you should invest in water.
Water Purification and Services
An entire industry is built around providing cities with clean water for drinking and cleaning. Water purification companies treat water to remove bacteria and parasites from our drinkable water sources. If you want to invest in a sector that will always be around, consider putting water purification and treatment at the top of your investment in the water watchlist.
Water Utilities
You can invest in water with water utility stocks. Utility stocks often get a reputation for being boring with little capital appreciation. While this might be true, they also provide stability and usually come with a solid dividend yield. Some utility companies provide hydroelectric power, but others provide water and wastewater services. They might be boring, but they are essential to our everyday lives.
Food and Beverages
The main reason to invest in water? We need to drink it to survive! There are plenty of companies that provide bottled water to consumers. But nearly every food and beverage product on Earth requires water to produce. If you like juice, soda pop, coffee, or beer, all companies that make these products need water to operate!
Agriculture
We would be remiss if we didn’t mention one of America’s largest and most important industries: agriculture. Each year, nearly 70% of the world’s water supply goes to agriculture to harvest food and other crops. We are talking about the quadrillions of gallons of water annually. If you are looking for one industry to target that uses and relies on water the most, agriculture is where it is at. And it helps to invest in water.
Water Stocks Breakdown
American Water Works (NYSE: AWK)
American Water Works is one of the largest water utility companies in the country. It serves millions of residents across 24 states with water and wastewater services. This New Jersey-based company was established in 1886 but only went public in 2008. Since then, it’s returned a large percentage to shareholders in capital appreciation, which doesn’t include reinvestments of its dividend.
Why is American Water Works such a popular stock? It’s a regulated monopoly and has no competition in the markets in which it operates. This means the government regulates its rates and prices. American Water Works continues to expand its footprint with several company acquisitions. Anytime you can add a regulated monopoly to your portfolio at a reasonable valuation, it’s worth your while.
Essential Utilities (NYSE: WRTG)
As its name suggests, Essential Utilities is another American utility company that provides water and natural gas services to ten different states. While the company maintains a 70/30 base rate mix of water and natural gas utilities, the revenue from both segments is about even.
Essential Utilities serves customers, providing billions gallons of daily water. It operates over 14,275 miles of water main pipes and has 200+ wastewater treatment plants. This company is another regulated monopoly with a considerably safe and stable market share.
Xylem Inc (NYSE: XYL)
Xylem is not a water utility company. Rather, it provides technology and infrastructure to water companies. It teams with several water companies worldwide to help with data analytics and the logistics behind the transportation and treatment of clean water.
While Xylem does most of its business in the United States, it continues to grow its presence in Europe and emerging markets. Xylem recently announced the acquisition of Evoqua Water Technologies. The new entity will help provide a strong platform to help defeat the world’s water problems.
Best Water Stock ETFs
Invesco Water Resources ETF (NASDAQ: PHO)
The largest dedicated water ETF is the Invesco Water Resources ETF. This fund focuses on global water-related US-listed stocks and is based on the NASDAQ OMX US Water Index. It holds 38 different companies, including all three stocks listed above. Xylem is the third-largest holding in PHO, with an 8.15% weighted allocation.
First Trust Water ETF (NYSEARCA: FIW)
First Trust Water ETF holds 36 different US-listed water-related stocks. All three of the stocks mentioned in this article are listed in the top-six weighted allocations in the ETF. This fund has a slightly lower MER than PHO at 0.53%, with a slightly higher distribution yield of 0.63%. Since its inception in 2007, FIW has provided a cumulative return of more than 300%.
PHO ETF Performance (2026 YTD)
| Year | Performance | 2026 (YTD) | +5.3% |
|---|---|
| 2025 | +21.2% |
| 2024 | +15.7% |
| 2023 | +19.4% |
| 2022 | -18.5% |
Final Thoughts: How to Invest in Water Stocks
As essential as it is to our daily lives, water is not an overly exciting investment. Many of these companies operate as regulated monopolies in the utilities sector. While this is great for pricing power, this also means there is relatively low growth compared to other industries. Luckily, the investment’s trade-off for less capital appreciation is portfolio stability and a decent dividend yield.
Should you invest in water stocks? Water should be treated no differently from other commodities like oil and gold. There is a near-infinite demand for water from every living thing. But water isn’t exactly a scarce commodity. New technologies are providing clean water solutions in most regions of the world now. It can be a solid sector to invest in, but expect those gains to be more of a trickle than a waterfall! Please do not trade any of the securities on this water stocks list unless you know how to trade.
