3 Water Utilities Stocks Outperform Industry in 3 Months: Time to Buy?

Industry Overview - The Zacks Utility - Water Supply industry is providing continuous services to millions of customers in the U.S. and is focusing on infrastructure upgrades and maintenance to enhance service reliability [1] - The U.S. water infrastructure, comprising over 2.2 million miles of pipelines, is aging, with nearly 20% of installed water mains beyond their useful lives, leading to significant water waste and potential contamination [2] - An estimated $896 billion investment is required over the next 20 years to sustain and expand drinking water and wastewater services to meet demand, according to the U.S. Environmental Protection Agency [2] - The regulated water industry is fragmented, posing operational challenges for small service providers in meeting funding requirements for necessary upgrades [3] - The Federal Reserve's intention to cut interest rates may allow utility providers to secure funding at lower costs for infrastructure projects [3] Company Performance - American Water Works Company (AWK) has a three-month return of 12.6%, a dividend yield of 2.13%, and plans to invest $3.1 billion in 2024, with a total investment of $16-17 billion planned from 2024 to 2028 [6] - American States Water Company (AWR) has achieved a three-month return of 15.4%, a dividend yield of 2.30%, and aims to invest $573.1 million from 2025 to 2027 [7] - SJW Group has reported a three-month return of 13.1%, a dividend yield of 2.72%, and plans to invest $540 million in water and wastewater infrastructure over the next three years [8]