8 Best Water Stocks To Invest In

04. American Water Works Company, Inc. (NYSE:AWK)

Number of Hedge Fund Holders: 24

American Water Works Company, Inc. (NYSE:AWK) is recognized as a premier water utility stock due to its role in providing essential water and wastewater services to over 14 million people across the United States. As a leader in the sector, American Water Works Company, Inc. (NYSE:AWK) consistent investments in infrastructure and strategic acquisitions have solidified its position as a top water stock for investors looking for stable and reliable returns.

During the second quarter of 2024, the company reported strong financial results with earnings per share (EPS) of $1.42, compared to $1.44 during the same period last year. Despite a slight year-over-year decline, the results are in line with American Water’s expectations and demonstrate the resilience of its business model. In the first six months of 2024, the company recorded EPS of $2.37, reflecting stable performance amidst varying market conditions. Given these results, American Water Works Company, Inc. (NYSE:AWK) raised its 2024 EPS guidance to the higher end of its range, now expected between $5.25 and $5.30.

The company’s robust capital investment program, amounting to $1.4 billion year-to-date, is a testament to its commitment to enhancing and expanding its service capabilities. This investment contributed to the addition of 43,000 new customers in the first half of 2024 through acquisitions and organic growth. With nearly $500 million in acquisitions under agreement, American Water Works Company, Inc. (NYSE:AWK) outlook for continued expansion remains strong.

Moreover, the company’s strategic focus on regulatory approvals has been highly successful. American Water has completed four rate cases in various states, authorizing 100% of the capital investments made, ensuring continued revenue growth and capital recovery. Such regulatory support is crucial as the company navigates complex investment needs, particularly in states like Pennsylvania, where it has invested $1 billion since its last rate case.

As of Q2 2024, American Water Works Company, Inc. (NYSE:AWK) was held by 24 hedge funds, a decrease from 36 in the previous quarter. This indicates a consolidation in its investor base, possibly due to shifts in market sentiment or portfolio adjustments. Nevertheless, American Water Works Company, Inc. (NYSE:AWK) long-term fundamentals, backed by industry-leading earnings and dividend growth targets of 7% to 9%, make it an attractive pick for investors seeking stable returns from a regulated utility with a strong growth trajectory.