On January 13, 2026, according to a Securities and Exchange Commission (SEC) filing, Ausbil Investment Management Ltd reported taking a new equity position in H2O America by purchasing 53,119 shares. The acquisition was valued at approximately $2.60 million when calculated using the average closing stock price throughout the quarter. By the quarter's end, the position's market value stood at $2,602,300, which reflects the original share acquisition cost plus any subsequent changes in share price.
This recent position represents about 1.48% of Ausbil’s reported U.S. equity portfolio as of December 31, 2025, underpinning a measured addition within its broader asset allocation.
Other notable equity holdings in Ausbil’s portfolio as disclosed include:
- NextEra Energy (NYSE: NEE) at $10.42 million, accounting for 5.9% of assets under management (AUM)
- CSX Corporation (NASDAQ: CSX) at $9.47 million, making up 5.4% of AUM
- Norfolk Southern Corporation (NYSE: NSC) with $7.60 million representing 4.3% of AUM
- Entergy Corporation (NYSE: ETR) at $6.51 million, about 3.7% of AUM
- Cheniere Energy (NYSE: LNG) holding $6.46 million, also approximately 3.7% of AUM
At the close of trading on January 12, 2026, H2O America’s shares stood at $51.81. This reflects a year-over-year rise of 14.9%, which, while a notable appreciation, trails the broader S&P 500 index by nearly 3.91 percentage points during the same period.
Company Profile and Operations
H2O America operates as a regulated utility focused on water and wastewater services, including the essential steps of production, purification, and distribution, ultimately selling water to retail customers. Beyond its core regulated tariff services, it also engages in non-tariffed activities such as system operations and maintenance agreements. Additional ancillary revenue streams come from contracts for antenna site leases and protection plans offered to customers.
The company’s service area comprises approximately 232,000 water connections within California servicing close to one million residents, about 142,000 connections in Connecticut and Maine benefitting roughly 463,000 people, and an additional 29,000 connections in Texas for around 88,000 users. Its wastewater services cover roughly 3,000 connections in Southbury, Connecticut, and about 1,000 in Texas.
The firm’s business model centers on stable and recurring revenue generated primarily through regulated water and wastewater service fees, augmented by contracted services and supplementary offerings.
Financial Performance and Growth Initiatives
H2O America reported revenues of $240.6 million during the third quarter of 2025, marking an increase from $225.1 million in the corresponding quarter the previous year. Net income also saw growth, advancing to $45.1 million from $38.7 million year-over-year for Q3. These financial indicators underscore ongoing operational improvement.
The water utility is actively expanding its geographic footprint through acquisitions targeting the Texas market, poised to increase revenue streams further. This strategic growth aligns with the company’s focus on solidifying its regulated utility presence across multiple states.
H2O America’s shares currently yield a dividend of 3.24%, providing investors with an income component alongside potential capital appreciation. This dividend yield situates the company among dividend-paying utility investments offering steady returns.
Year-to-date through January 13, 2026, the stock has appreciated approximately 6%, maintaining an upward trend from the previous year. The company’s price-to-earnings (P/E) ratio stands at 16.6, notable for being lower than its historical five-year average. This valuation metric suggests the stock may be attractively priced relative to its earnings performance, possibly contributing to Ausbil Investment Management’s decision to initiate a position.
Investment Implications
The establishment of a new holding by Ausbil Investment Management signals a measure of confidence in H2O America’s business fundamentals, steady growth trajectory, and valuation appeal. Given the company's consistent revenue increases and expansion plans through acquisitions, alongside a dividend yield that supports passive income generation, the investment aligns with a strategy focused on stable and regulated utility sectors.
Such a position could represent an attractive addition for investors seeking exposure to regulated water utilities known for essential services with recurring revenue streams.
Key Points
- Ausbil Investment Management has initiated a $2.6 million position in H2O America, comprising 1.48% of their U.S. equity holdings.
- H2O America provides regulated water and wastewater services to over one million people across California, Connecticut, Maine, and Texas, supplemented by ancillary services.
- The company showed revenue and net income growth in Q3 2025 and is expanding its Texas presence through acquisitions.
- Shares trade at a P/E ratio of 16.6 with a dividend yield of 3.24%, and have risen 14.9% over the past year.
Risks and Uncertainties
- The stock’s recent performance lags the broader market index, reflecting competitive or sector-specific challenges.
- Being a regulated utility, revenues and pricing are subject to government oversight, which could limit profitability or operational flexibility.
- The successful execution of acquisition strategies, especially in Texas, remains critical to anticipated revenue growth and bears integration risks.
Disclosure
The information presented reflects data available as of mid-January 2026 and is based on reported SEC filings and company disclosures. It is not intended as investment advice but aims to provide a factual overview of recent investment activity and company financials.