Utilities Stocks Bounce as United Ups Dividend

United Utilities raises dividend despite a fall in profits, sending price of utilities stocks up. We reveal two other utilities stocks that offer sustainable dividend growth

Karen Kwok 27 May, 2016 | 10:54AM
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Shares in United Utilities Group (UU.) are up after the UK’s largest listed water company yesterday reported a 0.6% revenue growth to £1.73 billion. The company’s underlying operating profit fell 9.1% to £604 million, hurt by the new regulated price controls imposed on the water industry.

The company’s final dividend was raised 2% to 25.6p, bringing the total dividend for the year to 38.45p, a rise compared to the year before. Morningstar analysts said this was in line with management’s annual dividend growth target.

In early trading today the group’s shares are up 1.5% as the market digested the latest announcement. The stock has gained 2.4% year to date.  Other utilities group in the UK also posted slight gains: National Grid (NG.) was up 0.8% to 7.5p at 10.30am while SSE (SSE) was up 0.5% to 8p. Water utilities group Severn Trent (SVT) also gained 0.6% to 13p. Centrica (CNA) dropped slightly at 0.6% to 1.20p.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Centrica PLC65.94 GBP0.00Rating
National Grid PLC1,002.40 GBP0.00Rating
Severn Trent PLC2,846.00 GBP0.00
SSE PLC1,607.50 GBP0.00Rating
United Utilities Group PLC1,085.50 GBP0.00Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk