Yesterday I came across an interesting article about the global water industry by John Dickerson. There is a table in the article which shows that U.S. water utilities had a surprisingly good investment record from 1995 to 2005 compared to the S&P 500. I was gratified to see that all of the best-performing water utilities mentioned in the article are components of PowerShares Water Resources (PHO), which I own. However, the list also contains several smaller and lesser known water companies. After doing a little checking, I think Artestian Resources (ARTNA) is perhaps the best of these and I am adding it to the watchlist.
ARTNA produces and sells water and offers wastewater treatment services in the state of Delaware. This small company has dramatically outperformed the S&P over the last ten years, but with much less volatility and a higher dividend yield. The shares have a beta of .26 and a current yield of 3.32%.
Recent price performance has not been impressive, though. The shares made an all-time high of 21.80 last April and since then they have been backing and filling with an ominous looking volume pattern. This is a stock that looks like it could head south with vigor when a market correction occurs. And if that does happen, it might be a good time to pick up a few shares of ARTNA.