United Utilities Group is a water and wastewater company and serves more than 7 million people and 200,000 stores in the North-West of England. This makes it one of the largest water suppliers in the UK. United Utilities has a broad infrastructure network consisting of 42,000 km of water pipes, 76,000 km of wastewater pipes, 569 wastewater treatment plants and 94 water treatment plants. It also owns and manages over 56,000 hectares of land, making it the largest corporate landowner in England. Hence, the company is strongly rooted in the north-west of England and should be viewed as a pure water provider. However, United Utilities consequently operates exclusively in a highly regulated market, thus depending on political decisions. Looking at it the other way round, an investment in United Utilities can be seen as a certain protection against inflation as tariff increases (water prices) are linked to annual price increase rates. Over the years, United Utilities has been a constant dividend payer and has gradually increased its dividend. In 2020, the company decided to pay its coming dividends based on the UK consumer price index. Before, United Utilities based its payout on the retail price index (RPI) growth rate, which has been typically higher than the consumer price index (CPIH).
England – Water Utility