Five Water Stocks That Hedge Funds Like

#3 Aqua America Inc (NYSE:WTR)

– Number of Hedge Fund Holders (as of June 30): 10
– Total Value of Hedge Fund Holdings (as of June 30): $118.52 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 1.90%

Aqua America reported in-line earnings of $0.33 per share for its second quarter, while revenue for the period was $203.9 million, missing the consensus estimate by $5.71 million. Despite the revenue miss, Aqua America raised the quarterly dividend by 7.5% to $0.1913 per share. The management also continues to expect EPS of $1.30 to $1.35 and total customer base growth of 1.5% to 2% for the full 2016. The smart money mostly maintained their holdings in the stock. Ten funds from our database were long Aqua America Inc (NYSE:WTR) as of the most recent 13-F reporting period, unchanged from that of the previous quarter.

#2 SJW Corp. (NYSE:SJW)

– Number of Hedge Fund Holders (as of June 30): 12
– Total Value of Hedge Fund Holdings (as of June 30): $47.62 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 5.90%

SJW Corp has had a year to remember. Shares of the water utility company are up an astounding 45% year-to-date, as snap up shares for the company’s $0.81 per share annual dividend, which translates into a yield of 1.91%. Investors have also been buying the stock due to the company’s better-than-expected earnings for the second quarter (reported EPS of $0.82 versus estimates of $0.41). Part of the reason for the beat was the management recognizing $8.7 million in true-up revenue as a part of the decision on the company’s 2015 California General Rate Case application. The number of investors tracked by us with holdings in SJW Corp. (NYSE:SJW) inched up by quarter-over-quarter to 12 at the end of June.

#1 American Water Works Company Inc (NYSE:AWK)

– Number of Hedge Fund Holders (as of June 30): 21
– Total Value of Hedge Fund Holdings (as of June 30): $352.59 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 2.30%

With 21 funds holding shares at the end of June, American Water Works Company Inc (NYSE:AWK) is the smart money’s favorite water-related stock on our list. Similar to the other companies covered in this article, American Water Works’ earnings are rather stable. In its second-quarter report, American Water Works Company reaffirmed the 2016 EPS of $2.75 to $2.85 that they had issued in the previous quarter. However, unlike some of the other stocks on our list, American Water has strong earnings growth ahead. The management has said the company is on track to meet its long term goal of increasing earnings at 7% to 10% CAGR from 2016 to 2020.

Disclosure: none