Severn Trent: Boring Is Beautiful
LONDON --Severn Trent (ISE: SVT.L) delivered a wholly uneventful report on its first-quarter activities. Water consumption declined as expected. Forecast bad debt expense remained at 2.2% for the year. Expectations for operating expenses and capital expenditure are unchanged.
Perhaps the only surprise was a joint venture with Costain (ISE: COST.L) announced in late June, which is expected to take advantage of new government efforts to introduce competition into the country's water market. This new business is targeting high-volume commercial and industrial customers looking for a single provider for operations that may be located around the country.
However, with uncertainty swirling, the type of predictability offered by Severn Trent is just what investors are looking for -- as is the healthy dividend yield, which remains at 4.1%. Severn Trent and its fellow water utilities Pennon Group and United Utilities have seen their shares rise more than 10% since the beginning of the year, far surpassing the FTSE All-Share's 2.2% rise.
The search for certainty was one of the reasons analysts at The Motley Fool named the utility sector one of its Top Sectors for 2012. To learn more as well as to find out the other two sectors they think offer investors superior returns, download the free report today.
"The Motley Fool's Top Sectors for 2012"offers three sectors we think most investors are overlooking, which provides us with the opportunity to find high-quality companies at bargain prices. Download the free report today to find out where we see opportunity.
Further Motley Fool investment opportunities:
The article Severn Trent: Boring Is Beautiful originally appeared on Fool.com.Nate Weisshaar does not own any shares discussed above. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.