The drought in California has made everyone aware of the value of water. The water utility industry, made up of municipally owned and privately owned utilities, have the responsibility of supplying water to households and businesses. The utility industry is facing serious challenges, however, such as water scarcity, increasing cost of supplying safe and reliable water, financing and building advanced metering infrastructure. Just as important is the challenge of educating the public that it will have to pay more for water. Here are some of the best water utility companies TheStreet Quant Ratings says you should consider looking at. Number 3 is Middlesex Water Company. With an 'A' rating, the company's strengths can be seen in its revenue growth and increase in net income. 2nd is, American States Water Company. This rating is also an 'A.' American States Water thrives in its solid stock price performance and expanding profit margins. Number 1 is American Water Works Company. With an 'A' rating the company flourishes in its revenue growth and increase in net income. TheStreet Ratings are algorithmic stock picks based on 32 major data points. S&P 500 stocks rated 'buy' yielded a 16.5% return in 2014, beating the S&P 500 Total Return Index by more than 300 basis points. For the full reports on these stocks, you can check out TheStreet.com/QuantRatings.