8 Water Stocks To Follow In 2022

This is an ongoing series of Water Stocks that is published yearly during the month of December. The year 2021 will be remembered for many significant events including the second year of COVID, supply chain disruption, and political turmoil. None of these slowed the stock market. The Dow Jones Industrial Average is up about 20% YTD.  The Nasdaq is up 24% YTD and up more than 60% for the last 24 months. The S&P 500 is up 28% YTD. The 30-year average return for the Dow Jones Industrial Average is 10.72%. 2021 was a very good year for the stock market.

Again, the best performers in the water stocks portfolio were the ETFs, most up around 28% for the year. The best performing stock was up 32% and not one had a decline. Take a look below to see the details. This series of articles dates back to 2012 intending to increase awareness of water scarcity, potentially raise capital for water infrastructure and provide an opportunity to do more than just complain about rising water prices.

Two additional indicators we will begin to watch are:

Bitcoin up 143% this year

Here is one of my favorite tweets about Bitcoin this year.

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The California Water Index was up 46% this year.

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We have been following a portfolio of water stocks and ETFs for 11 years now.

The worst performer is up 70% over the last five years and the best performer up 148%.

American Water Works Co. Inc. (NYSE: AWK)

AWK is up 22% YTD. It climbed 24% in 2020 after an increase of 19% the year before. This stock continues to be a solid performer. During the Coronavirus crash it dropped from 135 to 100. During the last 5 years this stock is up 148%. I’m not sure where we could have found such good gains in the past five years in such a conservative industry. American Water Works water stock provides water and wastewater services to 15 million people in 30 U.S. states and parts of Canada. It has been the best performing water stock in the portfolio.

awk - water stocks 2022

Aqua America Inc. (NYSE: WTRG)

Aqua American/Essential Utilities is up 10% YTD after a flat year last year. In the last five years it has gained 69%. Aqua America is a holding company for a group of regulated utilities serving 3 million customers in 13 states ranging from Texas to Maine. During January of 2020, Aqua America changed its name to Essential Utilities.

wtrg -water stocks 2022

California Water Service Group (NYSE: CWT)

This water company is a utility serving California, Washington, New Mexico, and Hawaii, and American States Water Co. Year to date 2021 California Water Service Group is up 32%. For the last five years, the water stock is up 103%. A vast majority of their revenue comes from states hit hard with drought. This water stock experienced a 40% drop in value during the Coronavirus crash.

cwt -water stocks 2022

American States Water Company (NYSE: AWR)

This California-based utility provides water, electric, and contracted services in the United States. YTD this stock is up 25% after a 10% down year last year.  During the past five years, this stock is up 118% and been a solid performer over the last 11 years and is diversified across the United States.

awr - water stocks 2022

Exchange-Traded Funds or ETFs

Another option to invest in water is Exchange Traded Funds (ETF). Think of an exchange-traded fund as a mutual fund that trades on a public exchange, like the New York Stock Exchange. You get the diversification of a fund with the added benefit of the liquidity of a public exchange.

The five-year performance of ETFs for water was better than the stocks in the portfolio. The worst performer up 106% and the best up 135%. However, both did extremely well. Below is the past performance of a few of the popular water ETFs we have been following:

Invesco Global Water ETF (PIO)

This ETF is based on the Palisades Global Water Index. It focuses on companies providing potable water. This year the ETF is up 23%. It is also up 106% for the last five years.

pio - etf - water stocks 2022

Power Shares Water Resources Portfolio (PHO)

pho - etf - water stocks 2022

The largest Water ETF with more than $1 billion in assets. It also invests in companies providing potable water. In 2021 it is up 28%, and increased by 135% the last five years.

Guggenheim S&P Global Water Index ETF (CGW)

This ETF corresponds to the S&P Global Water Index. This ETF is the first U.S. listed global Water ETF. It was up 28% in 2021, up 107% the last five years.

cgw - etf - water stocks 2022

First Trust ISE Water Index Fund (FIW)

First Trust focuses on companies with wastewater and potable water direction. It was up 33% last year and up 29% this YTD and up 128% the past five years.

fiw - etf - water stocks 2022

As you can see, 2021 was a good year for the stock market, and a great year for our water stocks portfolio. The water futures index will be interesting in the west as we watch carefully to see what happens with the drought and the food supply.

Please do not take any of the information on this post as a recommendation to buy the stocks or ETFs. This is simply an attempt to start a meaningful conversation on the blog about investing in water. What do you think is in store for the stock market and water stocks in 2022? If you enjoyed this article, please consider subscribing or following me on twitter @H2oTrends

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