Stock Quotes in this Article: AWK, CWCO, SJW

 The following commentary comes from an independent investor or market observer as part of TheStreet’s guest contributor program, which is separate from the company’s news coverage. The opinions expressed are those of the author and do not represent the views of TheStreet or its management.

SAN FRANCISCO (Stockerblog) -- Water utility stocks provide excellent income diversification along with a portfolio of electric utilities and natural gas utilities. Water utilities provide CD beating yields ranging from 2.5% to 4%. There are about a dozen water utility stocks with dividends. Here are a few examples.


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    SJW (SJW) is a San Jose, Calif.-based water distributor that serves the Silicon Valley area and has customers in Cupertino, San Jose, Campbell, Monte Sereno, Saratoga, Los Gatos and parts of Santa Clara County. The stock trades at 20.5 times forward earnings and pays a yield of 3.1%.

    American Water Works (AWK) is a New Jersey-based distributor of water in 35 states and two Canadian provinces. The stock trades at 16 times forward earnings, with a decent 3% yield. Earnings for the quarter ended March 31 were up over 53.6% from the previous quarter on a 7.8% increase in revenue.

    Consolidated Water (CWCO), based in the Cayman Islands, distributes water in the Cayman Islands, the Bahamas, Belize, the British Virgin Islands and Bermuda. It also operates desalinization plants. The stock trades at a forward P/E of 16 and yields 3.3%.

    for a free list of the top-yielding water stocks, all with yields over 2.5%, visit

    At the time of writing, author had no positions in stocks mentioned.

    Fred Fuld III, the publisher of stock and bond investing blog Stockerblog and founder of WallStreetNewsNetwork, has been in the financial services industry for over 20 years, working as an investment advisor, options market maker at the Pacific Stock Exchange, vice president of a San Francisco money management firm, university faculty member and wholesaler for the New Alternatives Fund (the first environmentally conscious mutual fund). He is the author of the books Investing in Brazil Stocks and The Green Light on Green Stocks.