In a large saucepan add water, milk, salt, cayenne pepper and butter. For creamier grits. Bring contents to a boil over high heat.
Add grits to the boiling water 1/4 cup at a time, whisking constantly to prevent any lumps from forming.
Reduce heat to low and cook grits for 25 minutes, stirring occasionally.
Whisk in shredded cheese a little at a time until completely incorporated (See Note 2). Cook on low heat for another 5 minutes.
Serve with a sprinkle of shredded cheese and black pepper on top.
Notes
Be sure to use regular yellow cornmeal grits, which are sometimes labeled as polenta. Do not use quick-cooking grits or stone ground grits for this recipe.
At this point, feel free to also add crumbled bacon, cooked diced ham, or other cooked protein of your choice.