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Highlights
- Water utilities companies are working on five key commitments, including reducing sewage discharge from storm overflow to protect rivers and the local environment.
- Asset management companies that follow ESG norms are gradually shifting part of their investment towards such companies as they help protect the environment.
- FTSE100-listed firm Severn Trent Plc has already revealed its plans to invest nearly £100 million every year to fulfil its commitments.
UK-based water utility firms like Severn Trent, Anglian Water, and many others are working along with the environment ministry to improve their business practices to protect different rivers in the UK.
Water utilities companies are working on five key commitments, including reducing sewage discharge from storm overflow to protect rivers and the local environment. The move came after UK’s environment ministry last month urged water companies to improve their business practices to prevent harm to rivers and the environment.
Water companies have made other key commitments such as increasing people’s access to rivers, helping in rejuvenating wildlife on rivers and promoting transparency in plans and progress to achieve these goals. FTSE100-listed firm Severn Trent Plc has already revealed its plans to invest nearly £100 million every year to fulfil its commitments.
Water utility firms play a vital role in protecting the local environment and assist the government in achieving its climate goals. As a result, many assets management companies that follow ESG norms are gradually shifting part of their investment towards companies that help protect the environment and promote sustainable development. Moreover, these companies have been paying consistent dividends to their investors.
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Let us look at FTSE listed water utility companies that could be in focus today and their long-term investment prospects:
Severn Trent Plc (LON: SVT)
FTSE100 listed company provides water and wastewater treatment services to over 4.5 million households and businesses in the UK. It also operates through other segments i.e., business services under which it offers contract services to municipal and industrial clients.
Severn Trent’s business continues to perform well and in a sustainable manner. An environmental agency recently awarded the company 4 EPA status. Also, the company is part of the A-list published by Carbon Disclosure Project and amongst 200 global companies to achieve this rating. The company will declare its full-year result on 25 May 2022.
Severn Trent Plc’s last close was at GBX 2,825 on 11 March 2022, with a market cap of £7,070 million and a dividend yield of 3.6%.
United Utilities Group Plc (LON: UU.)
The company is involved in the water services business in the UK. It also offers project management services and has renewable energy projects.
For the six months ended 30 September 2021, United Utilities reported total revenue of £932.3 million, while its underlying operating profits rose by 4% to £332.8 million. The company declared interim dividends of 14.50p per share.
United Utilities Group Plc’s close was at GBX 1,052 on 11 March 2022, with a market cap of £7,316 million and a dividend yield of 4.1%.
Pennon Group Plc (LON: PNN)
The UK-based company operates 23 water reservoirs that offer water services to millions of customers in different regions of the UK. It also has business operations in European Union, China, and several other countries.
In March 2022, Pennon Group’s £425 million acquisition of Bristol Water Holdings UK Limited was cleared by the competition regulator, CMA, first announced in June 2021.
Pennon Group Plc’s last close was at GBX 995.50 on 11 March 2022, with a market cap of £2,676 million and a dividend yield of 3.5%.
