United Utilities Group UU.L
United Utilities Group is a water and wastewater services company operating as a regulated monopoly in northwest England, generating revenue through tariffs approved by the regulator Ofwat. United Utilities shows exceptional growth (revenue +22.9%, earnings +114.9%) and a high ROE (27.67%), but its high leverage (ND/EBITDA 6.07) and negative cash conversion (-31.91%) weigh on its financial health and valuation, in a rising rate environment that pressures its long-duration cash flows.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
United Utilities Group is a water and wastewater services company operating as a regulated monopoly in northwest England, generating revenue through tariffs approved by the regulator Ofwat. United Utilities shows exceptional growth (revenue +22.9%, earnings +114.9%) and a high ROE (27.67%), but its high leverage (ND/EBITDA 6.07) and negative cash conversion (-31.91%) weigh on its financial health and valuation, in a rising rate environment that pressures its long-duration cash flows.
Score by category
| Category | Score |
|---|---|
| Financial health | 5.4 |
| Quality / Moat | 5.5 |
| Valuation | 4.5 |
| Growth | 9.1 |
| Dividend | 4.1 |
| Momentum | 7.1 |
| Risk & Context | 8.0 |
OVERALL SCORE: 5.8/10
Context and risks
Moderate regulatory risk in the UK: Ofwat oversees tariffs and pressure on executive pay could attract additional scrutiny. Rising 10-year rates affect long-duration cash flow valuation, but this is partially discounted in the P/E and leverage.
News considered in the analysis
- 3 UK Stocks Tied To Water Spending As Drought Risk Hits Food Supply — La sequía podría aumentar la presión sobre la inversión en infraestructura hídrica, pero el impacto en beneficios es indirecto y ya parcialmente descontado.
- United Utilities Group (LSE:UU.) Stock Gets Fair Value Bump As Analyst Targets Split — Revisiones mixtas de analistas con algunos aumentos de precio objetivo, señal moderadamente positiva pero sin cambios fundamentales.
- Majority of United Utilities shareholders approve pay plans despite backlash — Aprobación de planes de remuneración sin impacto material en beneficios o valoración.
- United Utilities under fire over plans to hand top bosses share ‘allowances’ — Críticas a la remuneración de directivos podrían generar presión reputacional y regulatoria, pero sin impacto financiero directo.
- United Utilities Group (LSE:UU.) Stock Fair Value Edges Lower After Mixed Analyst Revisions — Revisiones a la baja de analistas reflejan cautela, pero sin cambios fundamentales en el negocio.
Verdict: Hold; the solid regulated monopoly position and recent growth offset balance sheet risk, but sensitivity to rates and regulatory scrutiny limit upside potential.
Main risk: High leverage (Net Debt/EBITDA of 6.07) combined with rising 10-year interest rates could increase financing costs and compress margins, despite the regulatory framework.
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