Water companies find, clean, treat, package, and distribute the world’s most essential resource, and 2025 has made that role more urgent. Climate-driven droughts and shrinking glaciers are intensifying supply risks, while population and economic growth keep demand rising — a reality highlighted in the UN’s 2025 World Water Development Report.
That gap between limited supply and steady demand is driving rapid investment in water infrastructure and technologies. Global water and wastewater treatment markets are expanding and smart-water solutions are expected to roughly double from about USD 23.7 billion in 2025 to over USD 43 billion by 2030 as utilities invest in sensors, leak detection, and digital controls. Reuse and recycling of wastewater are also growing fast, with the water-reuse market forecast to more than double toward 2030.
In Canada, the trend is mirrored by rising municipal and federal investment to modernize aging networks and manage escalating project costs. Budget and infrastructure programs in 2025 increased focus on resilient water systems and public-private partnerships, while cities accelerate projects ranging from pipe replacement to desalination and reuse pilots to cope with drought and population pressures.
If you’re exploring opportunities in the water sector, the following guide outlines why the industry is gaining momentum and highlights leading water companies worth considering for 2026.
What are water stocks?
Water stocks are companies that focus primarily on the purification, distribution, and management of water. From public drinking water to irrigation systems for crops to treating wastewater from sewage, water is a multi-billion dollar industry. It’s also one that’s likely to grow as the global supply of water grows scarcer.
Since water is essential, it’s considered a safe stock, or a stock that’s relatively immune to economic cycles.
That said, some companies in the water industry can also be considered tech stocks. Many are developing advanced technologies, such as desalination, that make potable water more accessible to a greater number of communities in the future.
Top Canadian water stocks
Canada has several water stocks on the Toronto Stock Exchange (TSX). You’ll also find many more great opportunities on foreign exchanges, especially those in the United States. That said, here are just a few of the most popular water stocks on the market today.
| Water Stock | Description |
| Anaergia Inc. (TSX:ANRG) | Canadian company that converts organic waste into renewable natural gas, fertilizer, and clean water using proprietary anaerobic digestion and waste-to-value technologies |
| Algonquin Power and Utilities (TSX:AQN) | Canadian power and utility company delivering regulated and renewable energy services, supplying electricity, water, and natural gas across North America |
| American Water Works (NYSE:AWK) | The largest water company in the U.S., with plans to expand into desalination technology. |
Anaergia, Inc.
Anaergia (TSX: ANRG) converts organic waste into renewable natural gas (RNG), fertilizer, and clean water using advanced anaerobic-digestion and waste-to-value technologies. The company holds hundreds of patents and operates in multiple regions worldwide, providing turnkey solutions that help divert waste from landfills while producing carbon-negative fuel and other resources.
In 2025 Anaergia delivered a strong performance with third-quarter revenue jumping 77% year-over-year and gross profit rosing 146%, leading to a return to positive adjusted EBITDA — a key milestone under its recently adopted capital-light strategy.
With growing demand for renewable energy and sustainable waste solutions, Anaergia appears well positioned for long-term growth — especially as it shifts toward technology sales and maintenance services rather than capital-intensive infrastructure projects.
Algonquin Power & Utilities
Algonquin Power & Utilities Corp. (TSX:AQN) is transforming into a pure-play regulated utility (electric, gas, and water) by selling non-core assets like its stake in Atlantica. Its regulated services, operated under the Liberty brand, include water distribution and wastewater systems serving customers in the U.S. and Canada, which benefit from rate increases and are central to the new low-risk strategy.
Financially, Q3 2025 saw Adjusted EPS of $0.09 (beating expectations) and a 61% surge in Regulated Services net earnings, driven partly by rate implementations across its utility portfolio, including water. AQN maintains its quarterly dividend of U.S. $0.0650 per share, giving it a forward dividend yield of approximately 4.3%, with 2026 outlook projecting continued EPS growth as the regulated segment dominates earnings.
American Water Works
Trading in the NYSE, American Water Works (NYSE:AWK) is the largest publicly listed water company in the United States. This large-cap stock has operated from its headquarters in New Jersey since 1886. The stock currently sits at $125 in January of 2025, off from its peak of $177 in 2022. In the third quarter of 2024, the company reported a 13% increase in revenue, reaching $1.32 billion, and earnings per share of $1.80, up from $1.66 in the same period the previous year.
The company is responsible for providing clean drinking water and reliable wastewater services in 16 states. It is a regulated monopoly, which basically means it doesn’t face competition in the regions where it operates, though its prices are regulated by state and local governments. It also has unregulated business in 47 states and Ontario.
American Water Works stock has increased around 25% to 26% per year since its initial public offering (IPO). And the company has plans to grow even more.
With 23 acquisitions since 2023, as well as plans to invest billions in its own expansion and desalination technology, this stock could be poised for serious growth. Not only that, but American Water Works alos pays a dividend, at 2.43%.
Are water stocks a good investment?
Water is a critical commodity. Plants, animals, people – even bacteria and microorganisms rely on it for survival.
So, yes, the water industry is certainly a good, core, long-term investment, as well as a solid, safe holding that could help stabilize a portfolio.
And water will only become more valuable in the future. Like it or not, the earth is heating up, and water is becoming more scarce. Only 3% of the earth’s water is freshwater – the other 97% is saltwater. Although many water companies are exploring mass water desalination, that is, removing salt from seawater to make it potable, the technology has not been perfected for mass scale use.
Many countries are on the brink of water shortages, too, from eastern Asia and sub-Saharan Africa to the southern U.S. and Mexico. Canada, which has the fourth-largest freshwater reservoirs in the world, doesn’t face the same existential threat of water shortage as other countries. However, severe droughts and wildfires have shown that even traditionally cold countries could also face water scarcity crises in future.
All that said, water is a great investment. As long as the water company in question has solid financials and a good business model, a water investment could be a significant long-term holding for Canadian investors. You could start with the water companies listed above, or if you prefer a passive approach to investing, you could choose any number of water-focused exchange-traded funds (ETFs).