December 26, 2024
Top 10 Stock United Utilities Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: United Utilities – Top 10 Stock in Low Emission Leaders
United Utilities is listed as a top 10 stock on December 26, 2024 in the market index Low Emissions because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 44 (44% performer), Obermatt assesses an overall hold recommendation for United Utilities on December 26, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Water Utilities |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Employee Focus EU, Renewables Users, Water Tech |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View United Utilities Hold
| 360 METRICS | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| SENTIMENT | ||||||||
| SENTIMENT | 53 |
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| 360° VIEW | ||||||||
| 360° VIEW | 44 |
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ANALYSIS: With an Obermatt 360° View of 44 (better than 44% compared with alternatives), overall professional sentiment and financial characteristics for the stock United Utilities are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for United Utilities. The consolidated Growth Rank has a good rank of 100, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 100% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 53, which means that professional investors are more optimistic about the stock than for 53% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 19, which means that the share price of United Utilities is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 81% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 18, which means that the company has a financing structure that is riskier than those of 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 44, United Utilities is worse than 56% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 100), and professional market sentiment is positive (Sentiment Rank of 53), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for United Utilities positive
ANALYSIS: With an Obermatt Sentiment Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock United Utilities is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for United Utilities. Analyst Opinions are at a rank of 75 (better than 75% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in United Utilities. Finally, the Professional Investors rank is 73, which means that currently, professional investors hold more stock in this company than in 73% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 53 (more positive than 53% compared with investment alternatives), United Utilities has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 16, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 84% of competitors). This could mean future risks and should make investors careful. Attention to negative news for United Utilities is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: United Utilities Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), United Utilities shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for United Utilities. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 58% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 21 which means that the stock price compared with what market professionals expect for future profits is higher than 79% of comparable companies, indicating a low value concerning United Utilities's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 33 which means that the stock price compared with what market professionals expect for future profit levels is higher than 67% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 3 is also low. Compared with invested capital, the stock price is higher than for 97% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on United Utilities's stock price compared with the company's operational size and dividend yields. Should dividend investors pick United Utilities? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose United Utilities only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: United Utilities Growth Momentum high
| GROWTH METRICS | December 26, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 89 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 87 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 76 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 65 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
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ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2024, United Utilities shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for United Utilities. Sales Growth has a value of 89, which means that, currently, professionals expect the company to grow more than 89% of its competitors. The same is valid for Profit Growth with a value of 87 and for Capital Growth with 76. In addition, Stock Returns had an above-average rank value of 65, which means they have been higher than 65% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, United Utilities exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: United Utilities Debt Financing Safety risky
| SAFETY METRICS | December 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 77 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 20 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 18 |
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ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company United Utilities has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of United Utilities is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for United Utilities and the other two below average. Refinancing is at 77, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 77% of its competitors. But Leverage is high with a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Liquidity is also on the riskier side with a rank of 20, meaning the company generates less profit to service its debt than 80% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), United Utilities has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for United Utilities are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: United Utilities Below-Average Financial Performance
| COMBINED PERFORMANCE | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| COMBINED | ||||||||
| COMBINED | 38 |
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ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), United Utilities (Water Utilities, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of United Utilities are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on United Utilities's financial characteristics. As the company United Utilities shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 100% of comparable companies (Obermatt Growth Rank is 100). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for United Utilities, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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