United Utilities Confirms Fiscal 2023 Guidance Thanks To a Tax Credit; Shares Rich

We maintain our GBX 850 fair value estimate after no-moat United Utilities confirmed its fiscal 2023 guidance in a trading statement. Fiscal 2023 results will be released on May 25. The 2023 dividend yield is 4.4% and the company pledges to grow the dividend in line with inflation through fiscal 2025. However, we view the shares as materially overvalued. For income-seekers interested in regulated utilities, we recommend National Grid, which yields 4.6%, pledges to grow its dividend in line with inflation through fiscal 2026, and whose shares appear fairly valued.