In a medium saucepan, bring water, milk, butter, and 1/4 cup cream to a boil.
Reduce to a simmer and add grits. Simmer over medium low heat for about 20 minutes or until liquid is absorbed and grits are very thick. Grits should pull away from the side of the pot when you stir it.
Stir in the remaining 1/4 cup of cream until fully incorporated.
If grits get too thick (they thicken as they cook further and as they sit), you can stir in more water, milk, or cream to thin them out to your desired consistency.
Serve with butter, salt, and pepper; cheese; or shrimp and gravy.
I love stone ground grits and feel free to use them — but if you're truly going for the smoothest, creamiest grits ever, use regular old-fashioned grits, like Quaker (not stone ground).