Pictet: Buying Opportunity in Utility Stocks

Water utility companies are on attractive valuations, and are yielding up to 4%, says Pictet Asset Management

Karen Kwok 8 February, 2017 | 2:56PM

Investors looking for a return that will keep pace with a more inflationary environment, should look again at water utility stocks – according to Pictet Asset Management.

Simon Gottelier, senior investment manager of thematic equity at Pictet told Morningstar on Tuesday that there was a buying opportunity for investors in this sector. “Many of these stocks have attractive yields of 3 to 4%. Also they are trading at attractive valuations relative to three or five years ago.”

He said many investors are looking for stocks that offered some protection against inflation in a post-Brexit world. Some investors may be looking to invest in infrastructure on the anticipation of increase on UK government’s infrastructure spending. But water utility stocks might be a good alternative, as they are trading on much cheaper valuations than infrastructure funds, Gottelier said.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Pictet-Water I dy GBP335.88 GBP-0.27
Severn Trent PLC2,437.00 GBP0.00
United Utilities Group PLC886.80 GBP0.00

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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