In this article, we will discuss: 11 Best Water Management Stocks to Buy.

On February 24, 2026, Reuters reported that Jensen Huang and Brad Smith revealed plans to reduce artificial intelligence data center water consumption in early 2026. Huang stated that Nvidia’s Vera Rubin chip system can run with cooling water at 45°C, compared with the industry standard of 6°C, minimizing evaporation. Smith said Microsoft has begun developing data centers with closed-loop cooling systems that circulate liquid through semiconductor housings, reducing water use by 90%. The changes address concerns that AI growth could increase water demand. Ecolab, a water-treatment business, forecasts that AI expansion could necessitate an increase in annual water use equal to existing US drinking water usage by 2030.

However, broader water risks persist. According to the Lawrence Berkeley National Laboratory, data centers in the United States utilized around 66 billion liters of water directly in 2023, but indirectly consumed 800 billion liters through electrical power generation. Meanwhile, S&P Global estimated that roughly half of data centers are located in places with high or very high water stress, such as Virginia, Arizona, and Singapore.

With that said, here are the 11 Best Water Management Stocks to Buy.

Methodology:

We used screeners to identify Water Management Stocks and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.

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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

11 Best Water Management Stocks to Buy

11. The York Water Company (NASDAQ:YORW)

On March 3, 2026, The York Water Company (NASDAQ:YORW) announced 2025 operating revenues of $77.488 million, rising $2.529 million from 2024, while net income was $20.058 million, down $267,000 year-on-year. The company reported basic and diluted earnings per share of $1.39, down $0.03 from the previous year. Customer growth and revenue from the Distribution System Improvement Charge resulted in higher revenues. Lower income taxes and a non-recurring life insurance gain boosted performance. However, higher operation and maintenance costs, increased depreciation, higher debt interest, and a lower allowance for funds used during construction negated those gains.

In 2025, The York Water Company (NASDAQ:YORW) invested $48.7 million in major projects such as main extensions, infrastructure enhancements, and an enterprise software system upgrade while also rebuilding approximately 54,100 feet of water main and 1,800 feet of wastewater main. The firm reported a $606,000 increase in fourth-quarter operating revenue and a $25,000 rise in net income, resulting in diluted earnings per share of $0.36.

The York Water Company (NASDAQ:YORW) impounds, purifies, and distributes drinking water. It owns and runs both wastewater collection and treatment systems.

10. Middlesex Water Company (NASDAQ:MSEX)

On February 19, 2026, Middlesex Water Company (NASDAQ:MSEX) reported $42.8 million in net income for 2025, a $1.5 million decrease from 2024, and diluted earnings per share of $2.36, down from $2.47 the previous year. The corporation’s operating revenues were $194.7 million, up $2.8 million year on year, mainly due to rate hikes and client growth throughout the Middlesex, Tidewater, and Pinelands systems. Operating expenses increased by $1.7 million.

The corporation announced fourth-quarter net income of $8.6 million and diluted EPS of $0.46, compared to $8.8 million and $0.49 in the previous year’s quarter, showing increased interest expense and income taxes, which were balanced by higher operating income. Middlesex Water Company (NASDAQ:MSEX) spent $96 million on water and wastewater infrastructure in 2025, and proposes to invest $506 million in utility infrastructure from 2026 to 2028, and paid a $0.36 dividend per share.

Middlesex Water Company (NASDAQ:MSEX) owns and manages regulated water utility and wastewater systems. The company’s services include water production, treatment, and distribution, full-service municipal contract operations, and wastewater collection and treatment.

9. American States Water Company (NYSE:AWR)

On February 18, 2026, American States Water Company (NYSE:AWR) announced diluted profits per share of $0.74 for the fourth quarter of 2025, down from $0.75 the previous year. The water business reported diluted EPS of $0.50 in the fourth quarter of 2025, compared to adjusted EPS of $0.39 in the fourth quarter of 2024, after deducting the impact of a one-time tax gain reported in 2024. The electric section reported diluted earnings per share of $0.11, compared to $0.13 the previous year, while the contracted service area grew earnings by $0.05 per share.

For the full year 2025, American States Water Company (NYSE:AWR) reported diluted EPS of $0.20 and adjusted EPS of $0.33 over 2024. In 2025, the firm spent $210.9 million on capital expenditures, and it expects to invest $185 million to $225 million in 2026.

American States Water Company (NYSE:AWR) works as a holding company that buys, produces, distributes, and sells water. It operates in three segments: water, electric, and contracted services.

8. Franklin Electric Co., Inc. (NASDAQ:FELE)

On February 17, 2026, Franklin Electric Co., Inc. (NASDAQ:FELE) announced fourth-quarter 2025 net sales of $506.9 million, up from $485.7 million in the prior-year quarter. The operating income was $51.6 million, up from $43.0 million the previous year. The firm reported diluted earnings per share of $0.87, jumping from $0.72 in the fourth quarter of 2024.

Franklin Electric Co., Inc. (NASDAQ:FELE) reported net sales of $2.1 billion for the fiscal year 2025, up from $2.0 billion in 2024, and operating income of $269.0 million, compared to $243.6 million the previous year. The company reported diluted EPS of $3.22 and adjusted diluted EPS of $4.14, up $0.22, or 6%, from the prior year. Management credited the company’s performance to price measures, transformation programs, and strategic investments in innovation and targeted acquisitions.

Franklin Electric Co., Inc. (NASDAQ:FELE) develops, manufactures, and distributes water and fuel pumping systems. It operates in three business segments: water systems, energy systems, and distribution.

7. Badger Meter, Inc. (NYSE:BMI)

On February 13, 2026, Badger Meter, Inc. (NYSE:BMI) announced a regular quarterly cash dividend of $0.40 per share, payable on March 13, 2026, to shareholders of record on February 27, 2026. The board raised the company’s share repurchase authorization by $75 million, bringing the total to $150 million through November 30, 2028, following the $75 million granted in November 2025.

On February 2, 2026, Argus Research analyst Kristina Ruggeri lowered Badger Meter, Inc. (NYSE:BMI) to Hold from Buy.

Separately, Badger Meter, Inc. (NYSE:BMI) reported fourth-quarter 2025 sales of $220.7 million, up from $205.2 million, with operating earnings of $43.0 million and diluted EPS of $1.14, resulting in $54.8 million in operational cash flow.  In 2025, record sales were $916.7 million, up 11% from the previous year’s $826.6 million. Base sales of $877.0 million rose 6% year on year.

Badger Meter, Inc. (NYSE:BMI) provides flow measurement, control, and communications solutions to water utilities, municipalities, and commercial and industrial customers worldwide. Its products are categorized as Municipal Water and Flow Instrumentation.

6. Mueller Water Products, Inc. (NYSE:MWA)

On February 4, 2026, Mueller Water Products, Inc. (NYSE:MWA) announced fiscal first-quarter net sales of $318.2 million for the period ending December 31, 2025, an increase from $304.3 million the previous year, as higher rates across most product lines offset slightly lower volumes. The corporation’s operating income increased to $56.7 million from $47.4 million, while adjusted operating income rose to $60.0 million from $52.4 million. Operating margin improved to 17.8% from 15.6%, while adjusted operating margin jumped to 18.9% from 17.2%. The firm reported net income of $43.2 million, or $0.27 per diluted share, up from $35.3 million, or $0.22 per share, while adjusted net income was $45.8 million, resulting in adjusted EPS of $0.29.

Mueller Water Products, Inc. (NYSE:MWA) reported adjusted EBITDA of $72.1 million, up from $63.5 million, while the adjusted EBITDA margin climbed to 22.7% from 20.9%. Operating activities produced $61.2 million in cash, and free cash flow was $44.0 million. The corporation repurchased $5.5 million in common stock during the quarter.

Mueller Water Products, Inc. (NYSE:MWA) manufactures and sells products and solutions used in the transmission, distribution, and measurement of water. It operates in two segments: Water Flow Solutions and Water Management Solutions.

5.  Zurn Elkay Water Solutions Corporation (NYSE:ZWS)

On February 3, 2026, Zurn Elkay Water Solutions Corporation (NYSE:ZWS) announced fourth-quarter net sales of $407 million, up from $371 million the previous year, with 10% core sales growth across nearly all product segments. The firm reported net income from continuing operations of $42 million, or $0.24 per diluted share, up from $36 million, or $0.21 per share. Adjusted earnings per share rose to $0.36 from $0.32 in the same period last year. The firm announced adjusted EBITDA of $104 million, or 25.6% of net sales, up from $91 million and 24.6% the previous year. Operating income increased to $60.4 million from $49.3 million, while the operating margin rose by 150 basis points due to sales growth, price realization, and productivity efforts implemented through the Zurn Elkay Business System.

In 2025, the company’s net sales reached $1.696 billion, compared to $1.567 billion in 2024. Zurn Elkay Water Solutions Corporation (NYSE:ZWS) reported net income from continuing operations of $192 million, or $1.12 per diluted share, with adjusted EPS hitting $1.52 and adjusted EBITDA totaling $442 million.

Zurn Elkay Water Solutions Corporation (NYSE:ZWS) is involved in the design, procurement, manufacturing, and distribution of water management products. It works in three geographical segments: the United States, Canada, and the rest of the world.

4. Watts Water Technologies, Inc. (NYSE:WTS)

On February 11, 2026, Watts Water Technologies, Inc. (NYSE:WTS) announced fourth-quarter 2025 sales of $625.1 million, up 16% from $540.4 million the year before, with operating income of $113.7 million and an operating margin of 18.2%, up 170 basis points. The company reported diluted earnings per share of $2.50, up 24%, while adjusted diluted EPS was $2.62, up 28%. Favorable pricing, productivity gains, and an extra delivery day drove sales growth, while acquisitions added $29 million in revenue.

Watts Water Technologies, Inc. (NYSE:WTS)’s full-year 2025 sales were $2.44 billion, up 8% from $2.25 billion, with an operating income of $448.1 million and an operating margin of 18.4%. The firm reported diluted EPS of $10.17 and adjusted diluted EPS of $10.58, which climbed by 17% and 19%, respectively. Operating cash flow reached $402 million, while free cash flow stood at $356 million.

During the quarter, Watts Water Technologies, Inc. (NYSE:WTS) acquired Haws Corporation, Superior Boiler, and Saudi Cast. The company expects sales to expand by 8% to 12% in 2026, with an operating margin of 18.8% to 19.4%.

Watts Water Technologies, Inc. (NYSE:WTS) produces and markets products used for water conservation, safety, and flow management. It operates in the following regions: Americas, Europe, Asia-Pacific, the Middle East, and Africa.

3. Essential Utilities, Inc. (NYSE:WTRG)

On February 25, 2026, Essential Utilities, Inc. (NYSE:WTRG) announced a full-year net income of $616.4 million, or $2.20 per share, up from $595.3 million, or $2.17 per share, in 2024, and sales of $2.47 billion, up 18.6% from $2.09 billion. The firm reported fourth-quarter net income of $132.7 million, or $0.47 per share, a decrease from $184.8 million, or $0.67 per share, a year ago, while quarterly revenue increased 15.7% to $699.1 million from $604.4 million. The company invested over $1.4 billion in infrastructure in 2025, amid higher operations and maintenance costs across the water and gas businesses.

The regulated water division made $1.33 billion in annual revenue, an 8.6% jump from $1.22 billion, whereas the regulated natural gas division contributed $1.12 billion, a 32.6% growth from $843 million. On February 10, 2026, Essential Utilities, Inc. (NYSE:WTRG) received shareholder approval for its planned merger with American Water Works Company, which is expected to close in the first quarter of 2027. The corporation also announced quarterly dividends of $0.3426 per share, payable on March 2 and June 1, 2026.

Essential Utilities, Inc. (NYSE:WTRG) is a holding corporation with subsidiaries that provide water, wastewater, and natural gas services. It functions through two segments: regulated water and regulated natural gas.

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

On February 18, 2026, Reuters reported that American Water Works Company, Inc. (NYSE:AWK)’s fourth-quarter earnings and revenue fell short of Wall Street projections, mainly due to rising expenses at the water and wastewater utility. The Camden, New Jersey-based firm reported adjusted earnings of $1.24 per share for the quarter ended December 31, up from $1.15 per share a year earlier but falling short of analysts’ expectations of $1.25 per share, according to LSEG data. The company’s overall operating revenue was $1.27 billion, lower than analysts’ projections of $1.29 billion. Shares fell approximately 1% in extended trade following the release.

The utility mapped out a long-term investment strategy, committing $46 billion to $48 billion over the next ten years to upgrade water and wastewater facilities. These infrastructure changes will help the corporation reduce leakage while also improving overall network effectiveness and resilience. American Water Works Company, Inc. (NYSE:AWK) also reiterated its 2026 adjusted profits projection, estimating earnings of $6.02 to $6.12 per share.

American Water Works Company, Inc. (NYSE:AWK) is a holding company that provides water and wastewater services. It functions through the segments Regulated Businesses and Other.

1. Xylem Inc. (NYSE:XYL)

On February 13, 2026, UBS analyst Joshua Spector reduced the price objective for Xylem Inc. (NYSE:XYL) from $168 to $155. The analyst kept a Buy recommendation on the stock.

Separately, on February 10, 2026, Xylem Inc. (NYSE:XYL) released fourth-quarter and full-year 2025 results, with quarterly orders totaling $2.4 billion, up 9% reported and 7% organically. The corporation reported $2.4 billion in fourth-quarter revenue, a growth of 6% reported and 4% organic, while earning $1.37 per share and an adjusted EPS of $1.42, a 20% increase. Net income was $335 million, yielding a 14.0% net income margin. Adjusted EBITDA margin rose by 220 basis points to 23.2%.

Xylem Inc. (NYSE:XYL) reported $9.0 billion in revenue for the fiscal year 2025, up 6%, with EPS of $3.92 and adjusted EPS of $5.08, up 19%.

The board declared a $0.43 per share Q1 dividend, payable on March 24, 2026, to shareholders of record on February 24, 2026. The company expects revenue of $9.1-$9.2 billion in 2026, with adjusted earnings per share of $5.35-$5.60.

Xylem Inc. (NYSE:XYL) designs, manufactures, and installs engineered technology for the water industry. It operates in three business segments: water infrastructure, applied water, and measurement and control solutions.

While we acknowledge the potential of XYL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than XYL and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. 11 Best Water Management Stocks to Buy is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.