The Best Water Stock for 2011 (WTR, AWK, AWR, CWT, LAYN, TTEK, WTS, PHO, PIO)

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Water is perhaps one of the most misunderstood and most under-invested themes for most investors looking for income and stability year after year.  It is also exceedingly harder and harder to invest in due to consolidation and due to unforeseen risks that are present in the economy.  Throughout the year we evaluate sectors and make our outlook picks.  Water is one of those sectors and it should be a part of most long-term investment portfolios.  Today marks the goal of picking the top water stock investment pick for 2011.

Looking through water investments is often a price-sensitive effort and investors rarely get to buy their favorite water stocks at big discounts.  In utilities, our review for the top pick in 2011 focused on Aqua America Inc. (NYSE: WTR), American Water Works Company, Inc. (NYSE: AWK), American States Water Company (NYSE: AWR) and California Water Service Group (NYSE: CWT).  We also went through the valuations and the outlook for Layne Christensen Company (NASDAQ: LAYN), Tetra Tech Inc. (NASDAQ: TTEK), and Watts Water Technologies, Inc. (NYSE: WTS).  In the land of ETFs, there are the PowerShares Water Resources (NYSE: PHO) and the PowerShares Global Water (NYSE: PIO) depending upon your geographic focus.

There is a clear winner for 2011 and we followed it up with a “runner-up selection” as to which water stock is the best pick for investors in 2011.  We have a basic table below for performance metrics and have added color with support for our top water pick for 2011.

Stock Current Mean Target 52-week Range
WTR $22.78 $22.50 16.45 – 22.97
AWK $25.30 $27.25 19.41 – 25.82
AWR $35.01 $39.50 31.20 – 39.61
CWT $37.94 $41.33 33.81 – 39.70
LAYN $35.00 $35.40 22.97 – 36.92
TTEK $25.67 $26.84 18.00 – 28.18
WTS $37.09 $38.00 27.51 – 37.41