10 Best Water for November 2025
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Market Overview & Selection Criteria
The current market environment is marked by shifting interest rates, sector rotation, and renewed focus on intrinsic value and cash flow generation. With volatility persisting, investors are seeking opportunities in companies that combine solid fundamentals, attractive valuations, and sustainable growth drivers. ValueSense’s proprietary analytics platform leverages advanced AI-driven analysis, intrinsic value modeling, and deep fundamental screening to identify stocks that are undervalued relative to their long-term potential.
Our selection criteria for this stock watchlist include: - Quality rating above 6.0 (ValueSense proprietary metric) - Positive intrinsic value gap (current price below ValueSense’s calculated fair value) - Strong revenue and free cash flow generation - Favorable sector positioning and growth catalysts - Reasonable debt-to-equity ratios and profitability metrics
This approach ensures a balanced mix of defensive, growth, and value-oriented stocks across multiple sectors, including utilities, industrials, and energy.
Featured Stock Analysis
Stock #1: Xylem Inc. (XYL)
| Metric | Value |
|---|---|
| Market Cap | $36.7B |
| Quality Rating | 6.6 |
| Intrinsic Value | $80.7 |
| 1Y Return | 24.6% |
| Revenue | $8,894.0M |
| Free Cash Flow | $925.0M |
| Revenue Growth | 5.6% |
| FCF margin | 10.4% |
| Gross margin | 38.2% |
| ROIC | 7.0% |
| Total Debt to Equity | 17.1% |
Investment Thesis
Xylem Inc. (XYL) is a global leader in water technology and infrastructure solutions, serving municipal, industrial, and residential markets. With a market cap of $36.7 billion and a current price below its intrinsic value of $80.7, Xylem presents a compelling opportunity for investors seeking exposure to essential infrastructure and sustainability trends. The company has demonstrated steady revenue growth of 5.6% and maintains a robust free cash flow margin of 10.4%, supported by a gross margin of 38.2%. Xylem’s ROIC of 7.0% and low debt-to-equity ratio of 17.1% further underscore its financial strength and operational efficiency.
Key Catalysts
- Increasing global demand for water infrastructure and sustainability solutions
- Expansion into emerging markets and new technology segments
- Strong recurring revenue from service and maintenance contracts
Risk Factors
- Exposure to regulatory changes in water management
- Potential for margin compression in competitive markets
- Macroeconomic sensitivity in municipal spending
Stock #2: American Water Works Company, Inc. (AWK)
| Metric | Value |
|---|---|
| Market Cap | $25.0B |
| Quality Rating | 6.1 |
| Intrinsic Value | $82.9 |
| 1Y Return | -5.9% |
| Revenue | $5,070.0M |
| Free Cash Flow | ($977.0M) |
| Revenue Growth | 12.3% |
| FCF margin | (19.3%) |
| Gross margin | 60.7% |
| ROIC | 10.1% |
| Total Debt to Equity | (77.4%) |
Investment Thesis
American Water Works (AWK) is the largest publicly traded water and wastewater utility company in the U.S., with a market cap of $25.0 billion. Despite a recent 1-year return of -5.9%, AWK’s intrinsic value is estimated at $82.9, suggesting potential upside. The company boasts a high gross margin of 60.7% and a solid ROIC of 10.1%, reflecting its strong pricing power and operational efficiency. However, AWK’s free cash flow margin is negative at -19.3%, and its debt-to-equity ratio is elevated at -77.4%, indicating higher leverage.
Key Catalysts
- Essential utility demand with stable revenue streams
- Regulatory support for infrastructure investment
- Ongoing rate base growth and asset expansion
Risk Factors
- High debt levels and interest rate sensitivity
- Regulatory risk and rate-setting challenges
- Negative free cash flow margin may impact dividend sustainability
Stock #3: Centrais Elétricas Brasileiras S.A. - Eletrobrás (EBR)
| Metric | Value |
|---|---|
| Market Cap | $23.3B |
| Quality Rating | 6.4 |
| Intrinsic Value | $13.0 |
| 1Y Return | 61.2% |
| Revenue | R$43.7B |
| Free Cash Flow | R$13.6B |
| Revenue Growth | 22.0% |
| FCF margin | 31.2% |
| Gross margin | 47.5% |
| ROIC | 12.1% |
| Total Debt to Equity | 61.9% |
Investment Thesis
Eletrobrás (EBR) is Brazil’s largest electric utility, with a market cap of $23.3 billion and a current price below its intrinsic value of $13.0. The company has delivered impressive revenue growth of 22.0% and a free cash flow margin of 31.2%, supported by a gross margin of 47.5%. EBR’s ROIC of 12.1% and moderate debt-to-equity ratio of 61.9% highlight its strong financial position and growth potential in the Latin American energy sector.
Key Catalysts
- Expansion of renewable energy projects in Brazil
- Government support for infrastructure modernization
- Growing demand for electricity in emerging markets
Risk Factors
- Currency and political risk in Brazil
- Regulatory changes in the energy sector
- Exposure to commodity price fluctuations
Stock #4: Korea Electric Power Corporation (KEP)
| Metric | Value |
|---|---|
| Market Cap | $19.3B |
| Quality Rating | 7.0 |
| Intrinsic Value | $115.1 |
| 1Y Return | 80.5% |
| Revenue | â©95.8T |
| Free Cash Flow | â©3,333.1B |
| Revenue Growth | 5.5% |
| FCF margin | 3.5% |
| Gross margin | 60.3% |
| ROIC | 5.3% |
| Total Debt to Equity | 63.6% |
Investment Thesis
Korea Electric Power (KEP) is a leading utility in South Korea, with a market cap of $19.3 billion and a current price below its intrinsic value of $115.1. The company has achieved a 1-year return of 80.5%, driven by strong revenue growth of 5.5% and a gross margin of 60.3%. KEP’s free cash flow margin is modest at 3.5%, and its ROIC is 5.3%, with a debt-to-equity ratio of 63.6%. KEP’s scale and market position make it a key player in the region’s energy transition.
Key Catalysts
- Government-led energy transition and renewable investments
- Stable domestic demand and regulated pricing
- Strategic partnerships in global energy markets
Risk Factors
- High debt levels and interest rate exposure
- Regulatory risk and pricing controls
- Competition from alternative energy providers
Stock #5: Pentair plc (PNR)
| Metric | Value |
|---|---|
| Market Cap | $17.4B |
| Quality Rating | 6.5 |
| Intrinsic Value | $117.1 |
| 1Y Return | 7.6% |
| Revenue | $4,128.4M |
| Free Cash Flow | $782.7M |
| Revenue Growth | 0.8% |
| FCF margin | 19.0% |
| Gross margin | 40.1% |
| ROIC | 13.4% |
| Total Debt to Equity | 41.8% |
Investment Thesis
Pentair (PNR) is a global leader in water solutions and flow technologies, with a market cap of $17.4 billion and a current price below its intrinsic value of $117.1. The company has a strong ROIC of 13.4% and a free cash flow margin of 19.0%, supported by a gross margin of 40.1%. PNR’s revenue growth is modest at 0.8%, and its debt-to-equity ratio is a manageable 41.8%. Pentair’s focus on innovation and sustainability positions it well for long-term growth.
Key Catalysts
- Increasing demand for water treatment and filtration solutions
- Expansion into high-growth markets and new product segments
- Strong recurring revenue from service and maintenance contracts
Risk Factors
- Exposure to cyclical industrial markets
- Competitive pressures in the water technology sector
- Macroeconomic sensitivity in global markets
Stock #6: Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS)
| Metric | Value |
|---|---|
| Market Cap | $16.8B |
| Quality Rating | 7.5 |
| Intrinsic Value | $33.2 |
| 1Y Return | 54.4% |
| Revenue | R$46.8B |
| Free Cash Flow | R$8,451.4M |
| Revenue Growth | 73.1% |
| FCF margin | 18.1% |
| Gross margin | 48.2% |
| ROIC | 24.0% |
| Total Debt to Equity | 77.4% |
Investment Thesis
SABESP (SBS) is a leading water utility in Brazil, with a market cap of $16.8 billion and a current price below its intrinsic value of $33.2. The company has delivered explosive revenue growth of 73.1% and a free cash flow margin of 18.1%, supported by a gross margin of 48.2%. SBS’s ROIC is an impressive 24.0%, and its debt-to-equity ratio is 77.4%. SABESP’s scale and market position make it a key player in Brazil’s water infrastructure sector.
Key Catalysts
- Expansion of water infrastructure in São Paulo and surrounding regions
- Government support for sanitation and water management projects
- Growing demand for clean water in urban areas
Risk Factors
- Currency and political risk in Brazil
- Regulatory changes in the water sector
- Exposure to commodity price fluctuations
Stock #7: Essential Utilities, Inc. (WTRG)
| Metric | Value |
|---|---|
| Market Cap | $10.9B |
| Quality Rating | 6.3 |
| Intrinsic Value | $27.8 |
| 1Y Return | 2.9% |
| Revenue | $2,338.2M |
| Free Cash Flow | ($477.8M) |
| Revenue Growth | 20.7% |
| FCF margin | (20.4%) |
| Gross margin | 59.4% |
| ROIC | 5.9% |
| Total Debt to Equity | 116.0% |
Investment Thesis
Essential Utilities (WTRG) is a U.S.-based water and wastewater utility, with a market cap of $10.9 billion and a current price below its intrinsic value of $27.8. The company has delivered strong revenue growth of 20.7% and a gross margin of 59.4%, supported by a ROIC of 5.9%. However, WTRG’s free cash flow margin is negative at -20.4%, and its debt-to-equity ratio is elevated at 116.0%. Essential Utilities’ focus on essential services provides stable revenue streams.
Key Catalysts
- Essential utility demand with stable revenue streams
- Regulatory support for infrastructure investment
- Ongoing rate base growth and asset expansion
Risk Factors
- High debt levels and interest rate sensitivity
- Regulatory risk and rate-setting challenges
- Negative free cash flow margin may impact dividend sustainability
Stock #8: Brookfield Renewable Corporation (BEPC)
| Metric | Value |
|---|---|
| Market Cap | $7,771.6M |
| Quality Rating | 5.9 |
| Intrinsic Value | $417.2 |
| 1Y Return | 45.0% |
| Revenue | $4,252.5M |
| Free Cash Flow | ($685.2M) |
| Revenue Growth | 3.4% |
| FCF margin | (16.1%) |
| Gross margin | 49.2% |
| ROIC | 1.4% |
| Total Debt to Equity | 133.8% |
Investment Thesis
Brookfield Renewable (BEPC) is a global leader in renewable energy, with a market cap of $7.8 billion and a current price below its intrinsic value of $417.2. The company has delivered strong revenue growth of 3.4% and a gross margin of 49.2%, supported by a ROIC of 1.4%. However, BEPC’s free cash flow margin is negative at -16.1%, and its debt-to-equity ratio is elevated at 133.8%. Brookfield Renewable’s focus on sustainability and innovation positions it well for long-term growth.
Key Catalysts
- Expansion of renewable energy projects globally
- Government support for clean energy initiatives
- Growing demand for sustainable energy solutions
Risk Factors
- High debt levels and interest rate exposure
- Regulatory risk and pricing controls
- Competition from alternative energy providers
Stock #9: UGI Corporation (UGI)
| Metric | Value |
|---|---|
| Market Cap | $7,181.2M |
| Quality Rating | 6.1 |
| Intrinsic Value | $44.9 |
| 1Y Return | 41.7% |
| Revenue | $7,332.0M |
| Free Cash Flow | $654.0M |
| Revenue Growth | (0.6%) |
| FCF margin | 8.9% |
| Gross margin | 49.3% |
| ROIC | 6.4% |
| Total Debt to Equity | 142.4% |
Investment Thesis
UGI Corporation (UGI) is a diversified energy company, with a market cap of $7.2 billion and a current price below its intrinsic value of $44.9. The company has delivered strong revenue growth of -0.6% and a free cash flow margin of 8.9%, supported by a gross margin of 49.3%. UGI’s ROIC is 6.4%, and its debt-to-equity ratio is elevated at 142.4%. UGI’s focus on energy distribution and infrastructure provides stable revenue streams.
Key Catalysts
- Essential utility demand with stable revenue streams
- Regulatory support for infrastructure investment
- Ongoing rate base growth and asset expansion
Risk Factors
- High debt levels and interest rate sensitivity
- Regulatory risk and rate-setting challenges
- Exposure to commodity price fluctuations
Stock #10: TransAlta Corporation (TAC)
| Metric | Value |
|---|---|
| Market Cap | $5,265.7M |
| Quality Rating | 4.7 |
| Intrinsic Value | $8.1 |
| 1Y Return | 70.7% |
| Revenue | CA$2,507.0M |
| Free Cash Flow | CA$305.0M |
| Revenue Growth | (20.9%) |
| FCF margin | 12.2% |
| Gross margin | 61.4% |
| ROIC | 2.2% |
| Total Debt to Equity | 271.3% |
Investment Thesis
TransAlta (TAC) is a Canadian power generation company, with a market cap of $5.3 billion and a current price below its intrinsic value of $8.1. The company has delivered strong revenue growth of -20.9% and a free cash flow margin of 12.2%, supported by a gross margin of 61.4%. TAC’s ROIC is 2.2%, and its debt-to-equity ratio is elevated at 271.3%. TransAlta’s focus on energy transition and infrastructure positions it well for long-term growth.
Key Catalysts
- Expansion of renewable energy projects in Canada
- Government support for clean energy initiatives
- Growing demand for sustainable energy solutions
Risk Factors
- High debt levels and interest rate exposure
- Regulatory risk and pricing controls
- Competition from alternative energy providers
Portfolio Diversification Insights
This stock watchlist offers a well-diversified portfolio across multiple sectors, including utilities, industrials, and energy. By combining defensive stocks like Xylem and American Water Works with growth-oriented companies like Eletrobrás and Brookfield Renewable, investors can balance risk and reward. The inclusion of international exposure through EBR, KEP, SBS, and TAC provides geographic diversification, while the focus on intrinsic value and cash flow generation ensures a disciplined approach to stock selection.
Market Timing & Entry Strategies
Given the current market environment, investors may consider a phased entry strategy, allocating capital to these stocks over time to mitigate timing risk. Focusing on companies with strong intrinsic value gaps and positive catalysts can enhance long-term returns. Regular monitoring of financial metrics and sector trends will help investors adjust their positions as market conditions evolve.
Explore More Investment Opportunities
For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:
📌 50 Undervalued Stocks (Best overall value plays for 2025)
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)
🔍 Check out these stocks on the Value Sense platform for free!
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FAQ Section
Q: How were these stocks selected?
A: These stocks were selected using ValueSense’s proprietary analytics platform, focusing on intrinsic value, quality ratings, financial strength, and growth potential.
Q: What's the best stock from this list?
A: The “best” stock depends on your investment goals and risk tolerance. Each stock offers unique strengths and opportunities, so consider your portfolio objectives when making decisions.
Q: Should I buy all these stocks or diversify?
A: Diversification is key to managing risk. Consider allocating capital across multiple stocks and sectors to build a balanced portfolio.
Q: What are the biggest risks with these picks?
A: Key risks include high debt levels, regulatory changes, currency fluctuations, and exposure to commodity prices. Always review each company’s risk factors before investing.
Q: When is the best time to invest in these stocks?
A: Market timing is challenging. A phased entry strategy and regular monitoring of financial metrics can help you make informed decisions over time.