The troubles surrounding the stricken utility group Thames Water have shaken the perception of London’s water groups as safe haven assets. United Utilities, Severn Trent and Pennon have been prized for their seemingly reliable dividends, which increase annually in line with inflation. Rising interest rates are piling pressure on leveraged companies across the sector. Thames Water has debts of £14 billion and the highest debt ratio in the sector at more than 80 per cent, according to Ofwat. How do the risks for London’s water companies stack up?
Market capitalisation: £6.58 billion
Dividend yield: 4 per cent
What marks Severn Trent out from its publicly listed peers? A higher return on equity, which at 12.2 per cent last year, also stands far above
