Walter,
14/3 is rated for 15 amps, 12/3 is tared for 20 amps. The water heater will not draw mote than that. Most usually contain a 1200-1500 watt heating element that will draw 10-12.5 amps. 14/3 will handle this, but I would use 12/3 anyway as a margin of safety.
If you really want to go top shelf, use a stranded marine cable in that size. It is far superior to any solid copper Romex type wiring and will NEVER BREAK from work hardening as the wires continually bounce down the road.