We recently published a list of 11 High Growth Utility Stocks To Invest In Now. In this article, we are going to take a look at where Aris Water Solutions, Inc. (NYSE:ARIS) stands against other best high growth stocks to invest in.
Power and utilities companies are facing a tough challenge in making clean, renewable energy more affordable and abundant. With electricity demand growing due to factors like more manufacturing, electrification, and increased data center use, utilities need to quickly expand their infrastructure while keeping energy reliable, rates low, and meeting decarbonization targets. While financing this expansion may be difficult with higher capital costs, there are opportunities to tap into funding from new initiatives like the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA).
According to Deloitte, data centers alone could triple their energy use by 2030, while EV sales and heat pump installations are rising steadily with support from state and federal incentives. To keep up, utilities are focusing on power generation, and solar is leading the way with massive growth. However, natural gas is still the biggest player, though its share might dip next year. Utilities are investing more than ever, with roughly $174 billion spent in 2024, to upgrade and expand the grid. At the same time, they are dealing with supply chain delays, rising costs from extreme weather, and slower regulatory processes. All of this means consumers are likely to see higher electricity bills in the coming years, with wholesale prices expected to rise nearly 20% between 2025 and 2028.
Spending on renewables is on the rise as well, and it is expected to top $25 billion in 2025 and hit $31 billion by 2027. That growth is backed by falling tech costs, government support, and strong demand from both consumers and corporations. Still, connecting faraway renewable sources to where people actually live will require a lot more transmission lines. Natural gas is crucial, especially as backup for renewables and to meet surging data center demand. Long-term gas investments are focused on safety, infrastructure upgrades, and newer uses like hydrogen blending.
Utility stocks, usually seen as slow movers, have been on a surprising hot streak this past year. With big gains in utility stocks and ETFs, it is becoming harder for investors to find affordable, dividend-paying utility stocks. According to Brent Coggins from Triad Wealth Partners, the strategy has shifted, and investors cannot just chase dividends anymore. Now, it is about finding utility companies that are ready to grow, adapt to climate demands, and expand nuclear capabilities. Basically, utilities are looking more like growth stocks than the traditional income plays they used to be. Recent market jitters, like the sell-off caused by Chinese AI startup DeepSeek, temporarily dragged down both AI-related tech and utility stocks. However, analysts like Julien Dumoulin-Smith from Jefferies still recommend focusing on stable, lower-risk names that pay solid dividends. Meanwhile, JPMorgan sees long-term potential in natural gas utilities too, despite the recent dip. Analyst Jeremy Tonet believes demand for natural gas, especially from power-hungry data centers, is not going away anytime soon.
With that market outlook in mind, let’s take a look at some high-growth stocks in the utility sector.
An industrial complex with a pillar of steam billowing from a water recycling plant.
Our Methodology
For this article, we used the Finviz screener to filter out utility stocks with 5-year revenue growth exceeding 20%, verifying this data through additional sources. We selected 11 stocks with the highest revenue growth manually. We have also mentioned the number of hedge fund holders in each firm as per Insider Monkey’s Q4 2024 database. The stocks are ranked in ascending order based on the average 5-year revenue growth.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Aris Water Solutions, Inc. (NYSE:ARIS)
Number of Hedge Fund Holders: 31
Average 5-Year Revenue Growth: 30.97%
Aris Water Solutions, Inc. (NYSE:ARIS) is a Texas-based company that assists oil and gas companies in the United States in managing their water use more sustainably. It specializes in collecting, transporting, and managing produced water from drilling activities. Aris also operates recycling facilities that treat and reuse this water. It is one of the top high growth stocks to consider. On February 26, Aris Water Solutions, Inc. (NYSE:ARIS) increased its quarterly dividend by 33% to $0.14 per share for Q1 2025. The dividend was paid on March 27, to shareholders on record by March 13.
Aris Water Solutions, Inc. (NYSE:ARIS) was successful in expanding into mineral extraction, beneficial reuse, and wastewater treatment beyond the oil and gas industry in 2024. In the fourth quarter of 2024, Aris acquired the McNeill Ranch, a 45,000-acre property in New Mexico and Texas, for $45 million. This acquisition strengthens the company’s disposal capacity and gives it more flexibility for future growth. The location also offers additional opportunities for income through renewable energy and other industrial uses. As of the end of 2024, Aris had a net debt of $422 million, with a leverage ratio of 2.0X, which is within their target range.
According to Insider Monkey’s fourth quarter database, 31 hedge funds reported owning stakes in Aris Water Solutions, Inc. (NYSE:ARIS), up from 19 funds in the prior quarter. Ranger Investment Management held the leading position in ARIS, with 1.80 million shares valued at over $43 million.
Overall, ARIS ranks 7th among the high growth utility stocks to invest in now. While we acknowledge the potential of ARIS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ARIS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
