United Utilities Group PLC
🇬🇧 UU.LSE · London · GB00B39J2M42
Utilities
GBX 1324.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
15.4
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 1324.00 ÷ 85.84 = 15.4
TTM period through: 2026-03-31
Forward P/E (estimated): 12.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.4
Yield (Fwd)
4.08%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 4.10%
Div. Growth (5Y CAGR)
3.9%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
6.1x
Latest quarter: 12.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 12.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 60.9%
Cash Flow Payout (TTM): 25.9%
FCF Coverage (TTM): -0.31x
ROE
27.7%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
11.6x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
📊 What Changed From Last Analysis?
Moved from OPTIMAL to CAUTION: Reassessed due to severe structural and regulatory headwinds—including the planned abolition of Ofwat, SAR reforms, and uncapped civil liabilities from recent Supreme Court rulings—which compromise long-term dividend safety despite the highly attractive valuation.
Summary
United Utilities operates an essential regional water monopoly, but severe structural shifts in UK regulation and emerging environmental liabilities create an asymmetric risk profile unsuitable for conservative dividend strategies. While the deeply discounted valuation (P/FFO 6.6) and 4.1% yield are tempting, unprecedented capital expenditure mandates and uncapped civil litigation risks threaten long-term cash flow predictability. Not recommended for new positions, as the structural transition risks outweigh the attractive pricing.
Sector Context
United Utilities operates as a regional regulated water and wastewater monopoly in the UK, providing essential services to millions of customers. While water utilities are traditionally defensive dividend payers, the UK sector is currently undergoing a massive structural transition marked by unprecedented environmental capital expenditure mandates and sweeping regulatory overhaul.
Temporary Opportunity Identified
Depressed valuation multiples driven by previous inflation-related accounting losses, high interest rates, and extreme regulatory headline noise.
📊 Strategy Analysis
- • Valuation multiples (P/FFO 6.6x, Forward P/E 12.1x) represent a deep discount relative to historical norms for regulated utility monopolies.
- • Offers an attractive 4.1% dividend yield backed by a flawless 10-year track record of consistent, uninterrupted payments.
- • The recent court dismissal of the £1.5 billion Carolyn Roberts environmental class action successfully mitigates a major immediate competition-law tail risk.
⚠ What to Watch
- • The UK government's sweeping regulatory overhaul and Special Administration Regime (SAR) reforms drastically elevate systemic equity risks and regulatory uncertainty.
- • The Manchester Ship Canal Supreme Court precedent strips the company of historical statutory immunity, creating structural exposure to uncapped private civil litigation for sewage discharges.
- • Unprecedented AMP8 (2025-2030) capital expenditure mandates are driving negative free cash flow (coverage -0.31) while the company carries elevated leverage (Net Debt/EBITDA of 6.09x).
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-06-06
Disclaimer: This information is for educational purposes only. Not financial advice.