8 Best Water Stocks To Invest In

02. Pentair plc (NYSE:PNR)

Number of Hedge Fund Holders: 40

Pentair plc (NYSE:PNR) is considered a water stock due to its extensive focus on water solutions, such as flow and filtration systems, which are essential for water purification and management across residential, commercial, and industrial applications. As of Q2 2024, Pentair is held by 40 hedge funds, an increase from 39 in the previous quarter, demonstrating rising investor interest in the company.

Pentair plc (NYSE:PNR) reported strong Q2 2024 financial results, beating expectations and showcasing the strength of its water-centric business. The company posted an earnings per share (EPS) of $1.22, surpassing the anticipated $1.15. Revenue reached $1.1 billion, reflecting a 2% year-over-year increase. The growth was supported by gains in the Pool and Commercial segments, partially offset by a decline in the Residential segment due to macroeconomic pressures.

One of Pentair plc (NYSE:PNR) notable strengths is its consistent margin expansion. In Q2, adjusted operating income increased by 16% to $271 million, while return on sales (ROS) expanded by 310 basis points to 24.7%. This achievement was driven by effective cost management and strategic pricing initiatives, underscoring Pentair’s ability to optimize profitability across its diverse portfolio. Additionally, adjusted EPS grew 18% year-over-year, further highlighting the company’s robust financial health.

Pentair plc (NYSE:PNR) Pool segment experienced impressive growth, with sales rising 17% year-over-year to $392 million. This marks the first time in eight quarters that the Pool segment returned to growth, driven by strong demand for aftermarket products and sustained consumer interest in pools. Segment income for Pool rose 27%, and ROS expanded 270 basis points to 34.1%. This performance indicates Pentair plc (NYSE:PNR) ability to capitalize on the trend of outdoor leisure activities, even amid economic headwinds.

Looking ahead, Pentair plc (NYSE:PNR) has raised its full-year 2024 EPS guidance to $4.25, reflecting confidence in its growth trajectory and strategic initiatives. With favorable secular trends like increased awareness of water quality, infrastructure upgrades, and sustainability concerns, Pentair is well-positioned for long-term growth. The company’s disciplined capital allocation strategy, which includes stock buybacks and consistent dividend increases, further enhances shareholder value. Overall, Pentair plc (NYSE:PNR) focus on innovation and operational efficiency make it a compelling choice for investors seeking exposure to the water industry.