How to Get Started in ASX Water Stocks

​​Why do investors choose the water market?​​

Decreased rainfall and the threat of ongoing drought in Australia make water an attractive investment. It’s a commodity that is becoming increasingly rare, but as mentioned is essential for human existence.

For the savvy investor there are plenty of opportunities to invest in water. The Investing News Network used TradingView's stock screener to find the biggest ASX water stocks by market cap. Companies are listed by market cap from largest to smallest, and data was accurate as of December 7, 2021.

1. Hansen Technologies

Market cap: AU$1.03 billion

Hansen Technologies (ASX:HSN) is a global provider of software to customers in more than 80 countries focused on the energy, water and communications industries. Founded in 1971, the company has grown to a customer base of more than 600, with target revenue of AU$500 million by 2025. The company expects to reach this target through its organic revenue growth and proven aggregation strategy.

In March 2021, the company's share price took a leap, possibly prompted by its significant agreement with Germany-based Telefonica (NYSE:TEF), resulting in an expected AU$25 million in revenue for Hansen.

2. Rubicon Water

Market cap: AU$277.59 million

First founded in 1995, water supplier Rubicon Water (ASX:RWL) listed on the ASX in September.

Rubicon has created a water-saving automation irrigation system that is used by governments, irrigation water authorities and farmers. For farmers, the technology modernises gravity-fed irrigation systems and improves the reliability and accuracy of water supply to farms.

The technology is deployed across more than 1 million hectares of land across 17 countries, and the company is on track for AU$80.4 million in the 2021 financial year.

3. Duxton Water

Market cap: AU$176.74 million

Duxton Water owns and manages a portfolio of water rights in Australia, primarily along the South Murray Darling Basin. The basin makes up 80 percent of Australian water trade.

Company revenue comes from offering a range of water supply solutions to irrigators, like entitlement leases, spot allocation sales and forward allocation contracts. Due to a constrained supply of water nationally and the impact of climate, Duxton feels confident there is growing demand for its business. The company boasts that it is the only listed vehicle that provides direct exposure to the Australian water market.

4. Purifloh

Market cap: AU$38.62 million

Purifloh (ASX:PO3) operates in water sanitation, indoor air purification and medical sterilisation. The company aims to purify water using its Free Radical Generator (FRG) technology, which will use free radicals to naturally purify water.

The FRG technology has been a focus for the company. While the technology has multiple applications, including water purification, another is as an aerosol that aims to kill airborne viruses and prevent the spread of COVID-19.