H2O Stocks: Get Ready for New Highs in Water! (AWK, AWR, WTR, CWT, CTWS, CWCO, MSEX, YORW, PHO)
Feb 11th 2013 12:05PM
Updated Feb 12th 2013 6:20AM
If you have been a reader of 24/7 Wall St. for very long, you know that we have been preaching over time that every investor needs some form of water investing strategy in his or her portfolio. This applies for growth investors and income investors alike due to the future and current status of water. Outside of the United States and a few other countries, water is conserved at much higher rates. In some nations, water is incredibly scarce.
This year has seen a great start for stocks, and many of the go-to water stocks are at or challenging new 52-week (or all-time) highs. Our focus is on the actual water owners rather than just the water technology and equipment makers for water companies and water utilities. It is amazing that just about this entire group is either right at 52-week or all-time highs or are close.
American Water Works Company Inc. (NYSE: AWK) is the king of all water stocks as the largest public water utility owner in America. It is now worth almost $7 billion, and with shares are $39.15 it is back within striking distance of a new all-time high as the 52-week range is $32.75 to $39.38. This also pays a 2.6% dividend yield to its common holders.
American States Water Co. (NYSE: AWR) is now within literally a few million dollars of being worth $1 billion. This company is geographically centric to California as it serves 75 communities in 10 counties in California. Shares crossed above the prior 52-week highs on Friday and again on Monday, with a new high of $52.08 against a prior 52-week range of $34.90 to $52.03. The dividend yield here is about 2.7%.
Aqua America Inc. (NYSE: WTR) is another regulated water utility, and its shares matched the prior 52-week high put in on Friday, and the new 52-week range is $21.52 to $28.70. This one is worth $4 billion and serves customers in customers in Pennsylvania, Texas, North Carolina, Ohio, Illinois, New Jersey, New York, Florida, Indiana, Virginia, Maine and Georgia. The dividend yield is now 2.4% since its shares have risen.
California Water Service Group (NYSE: CWT) is within about 2% of the 52-week high of $19.87, but still 10% from the prior highs of about $22 from 2006 to 2008. The company serves approximately 2 million people in California, Washington, New Mexico and Hawaii communities. This one is small at an $820 million market capitalization, and it has a dividend yield of about 3.3%.
One exception to the 52-week high challenge is Connecticut Water Service Inc. (NASDAQ: CTWS). Many will have never heard of it as it serves only about 55 communities in Connecticut (90,000 customers, which is about 300,000 people). Trading at $29.54, its 52-week range is $26.69 to $32.31. It also has a smaller market value of only $260 million, but it yields above-average at 3.3% for its common holders.
Consolidated Water Co. Ltd. (NASDAQ: CWCO) is even smaller and it is based in Cayman. Shares still hit a 52-week high of $9.34 on Monday, against its prior 52-week range of $6.70 to $9.30. The market cap here is a mere $135 million, and it also yields some 3.3%.
Middlesex Water Co. (NASDAQ: MSEX) is worth only about $307 million. With shares at $19.85, it is within 1% of going above the 52-week range of $17.48 to $20.06. Volume is very small here but it offers a 3.8% dividend yield. It provides service to approximately 150,000 customers, with a population of approximately 303,000 in central New Jersey through its contract sales. Its main operations are New Jersey, Delaware and Pennsylvania.
The York Water Co. (NASDAQ: YORW) just matched its 52-week of $19.05 on Monday against a 52-week low of $16.75. With a market cap of only $245 million, the dividend yield is about 2.9%. York Water specifically serves about 43 municipalities located in the York and Adams County area in Pennsylvania.
PowerShares Water Resources (NYSEMKT: PHO) is a water exchange traded fund, but we would note that it and other water ETF products tend to be more focused around the water technology and equipment makers. That being said, this ETF hit a high of $22.29 on Monday, against a prior 52-week range of $16.90 to $22.33.
What draws investors to water is the same thing that has drawn them for years and years: water is THE ultimate commodity. Americans in general have no clue how this precious commodity is abundant at home but scarce or in controlled supplies elsewhere. The drought conditions may have improved the understanding of how water scarcity works, but many would argue that America is still oblivious to this trend.
Investing in water is appropriate for just about all types of investors. All of the utilities pay a decent dividend or a high dividend, and all have proven to offer some defensive characteristics and growth characteristics for investors through time.
Filed under: 24/7 Wall St. Wire, Dividends & Buybacks, Infrastructure, Utilities, Value Investing, Water Tagged: AWK, AWR, CTWS, CWCO, CWT, MSEX, PHO, WTR, YORW