Share Centre share of the week: United Utilities
“This week we are choosing water utility group United Utilities as one for investors to consider. The group is based in North West England, supplying to around seven million people and 400,000 businesses. Those interested in the group will appreciate that an update last week reported trading to be in line with expectations, whilst stating that the Lancashire water contamination bug has cost the group £25m in compensation.
“In these volatile times the group provides a more defensive option for income orientated investors. The sector has also seen more than its fair share of corporate activity, which has significantly reduced the number of quoted companies. Bid rumours continue to surface from time to time, while the prospective 4.4% yield should keep investors happy in these low interest rate times. For those interested in United Utilities, we currently recommend the company as a ‘buy’. It is also worth noting that the decline in the share price from its January highs provides a more attractive entry point for lower risk investors.”