5 Best Water Stocks to Buy Now

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In this article, we discuss the 5 best water stocks to buy now. If you want to read our detailed analysis of the water sector, go directly to the 10 Best Water Stocks to Buy Now.

5. Xylem Inc. (NYSE:XYL)

Number of Hedge Fund Holders: 25

Xylem Inc. (NYSE:XYL) is a Rye Brook, New York-based designer and manufacturer of products and solutions related to water and wastewater management.

On August 3, Deane Dray at RBC Capital increased the price target on Xylem Inc. (NYSE:XYL) from $91 to $105 and maintained an Outperform rating on the stock. The analyst highlighted the company’s solid results for Q2 2022. During the three months ended on June 30, revenue was reported at $1.36 billion, beating the analysts’ forecast of $1.33 billion. Meanwhile, the adjusted EPS of 66 cents surpassed the analysts’ forecast of 54 cents. Xylem Inc. (NYSE:XYL) pays an annual dividend of $1.20 per share, which translates into an annual forward dividend yield of 1.21% as of August 24.

Not only did the company report strong Q2 2022 results, but it also increased its 2022 revenue and EPS guidance. Xylem Inc. (NYSE:XYL) now anticipates 8% – 10% YoY growth in revenue as compared to prior guidance of 4% – 6% YoY growth. The company reported revenue of $5.2 billion in 2021, and at the midpoint guidance of 9% YoY growth, Xylem Inc. (NYSE:XYL) anticipates 2022 revenue to be around $5.69 billion. Meanwhile, the average estimate provided by 19 analysts stands at $5.39 billion.

Xylem Inc. (NYSE:XYL) has a backlog of over $2 billion as of Q2 2022, and its book-to-bill ratio stands at 1.4. The company expects its margins to expand further as supply-chain-related challenges subside and the backlog is converted.

Impax Asset Management was the leading hedge fund investor in Xylem Inc. (NYSE:XYL) during Q2 2022.

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