Why shares in United Utilities are a ‘buy’

28th September 2015

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Graham Spooner, investment research analyst at The Share Centre, picks United Utilities as his share of the week – he explains why he is backing the group…

The group is based in North West England, supplying to around seven million people and 400,000 businesses.

Those interested in the group will appreciate that an update last week reported trading to be in line with expectations, whilst stating that the Lancashire water contamination bug has cost the group £25m in compensation.

In these volatile times the group provides a more defensive option for income orientated investors.

The sector has also seen more than its fair share of corporate activity, which has significantly reduced the number of quoted companies.

Bid rumours continue to surface from time to time, while the prospective 4.4% yield should keep investors happy in these low interest rate times.

For those interested in United Utilities, we currently recommend the company as a ‘buy’.

It is also worth noting that the decline in the share price from its January highs provides a more attractive entry point for lower risk investors.

1 thought on “Why shares in United Utilities are a ‘buy’”

  1. Jive Bunny says:

    “It is also worth noting that the decline in the share price from its
    January highs provides a more attractive entry point for lower risk
    investors.”

    ER, maybe, just maybe the reason for the share price decline is the cryptosporidium debacle at the Franklaw treatment works in Lancashire resulting in domestic compensation payments totalling approximately £18 million with further claims coming in from commercial enterprises re lost profits (so the sky’s the limit there!!) whilst further undisclosed costs have been incurred in the clean up of United Utilities water supply in Lancashire and that’s before I mention the current investigation of United Utilities’ practices by the authorities with future regulatory fines probable too!!!!

    And you think these shares should be purchased???!! Oh I geddit, you mean short them, now I’m with you!

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