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United Utilities Group PLC Class A UU.

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Stock XLON Rating as of
GBX 1,088.50 −2.50 (0.23%)
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Company Report

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United Utilities Earnings: Back to Black, as Expected, Fiscal 2024 Guidance Confirmed, Shares Rich

Tancrede Fulop

We maintain our fair value estimate of GBX 960 per share along with our no-moat rating after United Utilities released fiscal 2024 first-half results boosted by the indexation to high inflation of last year and a reduction in finance expense. The interim dividend is set at GBX 16.59, 5.7% higher than last year. The final dividend should also grow by 5.7%, implying a total fiscal 2024 dividend of GBX 48.1 and a 4.4% yield, in line with the sector median. Still, we view the shares as overvalued as evidenced by a fiscal 2024 P/E of 36 times.

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Price vs Fair Value

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UU. is trading at a 14% premium.
Price
GBX 1,091.04
Fair Value
GBX 877.00
Uncertainty
Low
1-Star Price
GBX 9,463.00
5-Star Price
GBX 879.00
Economic Moat
Sht
Capital Allocation
Cfhyyzvtd

Bulls Say, Bears Say

Bulls

Returns could increase in the next regulatory regime AMP8 starting in April 2025 due to the surge in interest rates since 2021.

Bears

The company lacks diversification, which brings regulatory risk.

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News

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Trading Information

Previous Close Price
GBX 1,091.00
Day Range
GBX 1,081.00–1,099.00
52-Week Range
GBX 896.76–1,128.50
Bid/Ask
GBX 1,088.00 / GBX 1,088.50
Market Cap
GBX 740.87 Bil
Volume/Avg
578,136 / 2.3 Mil

Key Statistics

Price/Earnings (Normalized)
179.69
Price/Sales
3.95
Dividend Yield
4.17%
Dividend Yield (Forward)
4.17%
Total Yield
4.17%

Company Profile

United Utilities Group is primarily a holding company for United Utilities Water, the country's largest regulated water and wastewater utility, serving customers in northwest England, including Manchester and Liverpool.
Sector
Utilities
Industry
Utilities - Regulated Water
Stock Style Box
Mid Growth
Total Number of Employees
5,000
Website
https://www.unitedutilities.com

Competitors

    Valuation

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    Metric
    UU.
    Price/Earnings (Normalized)
    		 179.69
    Price/Book Value
    		 3.42
    Price/Sales
    		 3.95
    Price/Cash Flow
    		 10.24
    Price/Earnings
    UU.

    Financial Strength

    Metric
    UU.
    Quick Ratio
    		 1.73
    Current Ratio
    		 1.80
    Interest Coverage
    		 0.34
    Quick Ratio
    UU.

    Profitability

    Metric
    UU.
    Return on Assets (Normalized)
    		 0.63%
    Return on Equity (Normalized)
    		 3.83%
    Return on Invested Capital (Normalized)
    		 2.00%
    Return on Assets
    UU.

    Utilities - Regulated Water Industry Comparables

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    Ticker
    Name
    Morningstar Rating for Stocks
    Economic Moat
    Market Cap
    AWK
    		American Water Works Co IncMhfmvf$25.7 Bil
    STRNY
    		Severn Trent PLC ADRMlkfrqd$9.9 Bil
    SVTRF
    		Severn Trent PLCSwrmfl$9.9 Bil
    WTRG
    		Essential Utilities IncNtpgtk$9.7 Bil
    UUGWF
    		United Utilities Group PLC Class AVyws$9.4 Bil
    UUGRY
    		United Utilities Group PLC ADRBkfp$9.4 Bil
    SBS
    		Companhia De Saneamento Basico Do Estado De Sao Paulo ADRJpmq$9.4 Bil
    GGDVY
    		Guangdong Investment Ltd ADRSss$4.5 Bil
    GGDVF
    		Guangdong Investment LtdJhky$4.5 Bil
    AWR
    		American States Water CoDgdyg$3.0 Bil