Wall Street Journal: Essential Utilities’ Stock Price Benefits from Investors’ Focus on Sustainable Investments

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Essential Utilities, formerly known as Aqua America, has seen its stock rise by 30.9 percent in the last twelve months as investors focus on sustainable investments.

Essential Utilities, formerly known as Aqua America, has seen its stock rise by 30.9 percent over the last twelve months as a result of a growing interest in sustainable investments, writes Nick Ravo for The Wall Street Journal.

Publicly traded water utilities, such as Essential Utilities with its largest subsidiary Aqua Pennsylvania, are especially interesting to investors due to their strong environmental, social, and governance – or ESG – profile.

Water firms operate according to environmental and governance mandates and provide an essential social service. This makes them attractive in the current climate.

Investors who are looking for those standards do not “have much they can look at in the [utilities] sector,” said Angie Storozynski, a former managing director at Macquarie Capital. “Funds with strict ESG mandates cannot invest in most electric utilities because of their nukes and coal plants.”

Additionally, water utilities have lower operating risk and face less customer-affordability pressures.

Another key part of the appeal of water utilities is reliable dividends. Despite being low compared to other utility sectors, companies in the water sector have been consistently increasing their dividends.

Read more about Essential Utilities at The Wall Street Journal by clicking here.

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Top photo credit: Joe Shlabotnik Faucet via photopin (license)

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