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United Utilities Group PLC Class A UU.

Morningstar Rating
GBX 1,093.00 −15.00 (1.35%)
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Company Report

United Utilities Earnings: Slightly Above Expectations; Fiscal 2025 Guidance Short of Expectations

We confirm our GBX 1,000 fair value estimate for no-moat United Utilities as we incorporate its fiscal 2024 results that were slightly ahead of FactSet consensus and our estimates. The group guided for fiscal 2025 below expectations on a recurring basis. The fiscal 2024 dividend is set at GBX 49.8, 9.4% higher than in fiscal 2023 and in line with the November 2022 consumer price index including owner-occupiers' housing costs and involving a 4.5% yield. The group guides for a fiscal 2025 dividend of GBX 51.87, implying 4.2% growth. We expect the policy to grow the dividend in line with inflation to be extended to the next five-year regulatory period AMP8, starting in April 2025. The UK water watchdog Ofwat will release its draft decision regarding AMP8's features on June 12 and its final determinations in December. In early 2025, United Utilities will unveil its dividend policy for AMP8. All in all, shares appear overvalued.

Price vs Fair Value

UU. is trading within a range we consider fairly valued.
Price
GBX 1,108.00
Fair Value
GBX 3,957.00
Uncertainty
Low
1-Star Price
GBX 9,979.00
5-Star Price
GBX 625.00
Economic Moat
Dsvp
Capital Allocation
Jjhdrtt

Bulls Say, Bears Say

Bulls

Returns will likely 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

Trading Information

Previous Close Price
GBX 1,108.00
Day Range
GBX 1,092.001,109.50
52-Week Range
GBX 896.761,139.50
Bid/Ask
GBX 1,092.50 / GBX 1,093.00
Market Cap
GBX 745.64 Bil
Volume/Avg
567,917 / 2.0 Mil

Key Statistics

Price/Earnings (Normalized)
375.94
Price/Sales
3.88
Dividend Yield (Trailing)
4.24%
Dividend Yield (Forward)
4.24%
Total Yield
4.24%

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

Comparables

Valuation

Metric
UU.
PNN
SVT
Price/Earnings (Normalized)
375.94232.2642.78
Price/Book Value
1.877.69
Price/Sales
3.882.302.92
Price/Cash Flow
9.6720.069.82
Price/Earnings
UU.
PNN
SVT

Financial Strength

Metric
UU.
PNN
SVT
Quick Ratio
1.731.160.85
Current Ratio
1.801.270.88
Interest Coverage
0.340.771.09
Quick Ratio
UU.
PNN
SVT

Profitability

Metric
UU.
PNN
SVT
Return on Assets (Normalized)
0.63%0.15%1.18%
Return on Equity (Normalized)
3.83%0.70%14.38%
Return on Invested Capital (Normalized)
2.00%2.19%5.04%
Return on Assets
UU.
PNN
SVT
See how this stock stacks up to its competitors with Morningstar Investor

Utilities - Regulated Water Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
AWK
American Water Works Co IncNjzdxxpYrkjmh$26.1 Bil
WTRG
Essential Utilities IncHmmdsdghGqynhg$10.9 Bil
SBS
Companhia De Saneamento Basico Do Estado De Sao Paulo ADRGztdl$10.5 Bil
STRNY
Severn Trent PLC ADRJltpr$10.0 Bil
SVTRF
Severn Trent PLCFzdbs$10.0 Bil
UUGWF
United Utilities Group PLC Class ALsftqvdycVny$9.6 Bil
UUGRY
United Utilities Group PLC ADRXrrlbhymRyvd$9.6 Bil
GGDVY
Guangdong Investment Ltd ADRRtvcl$4.1 Bil
GGDVF
Guangdong Investment LtdRggs$4.0 Bil
BJWTF
Beijing Enterprises Water Group LtdGnmy$3.2 Bil

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