Company - UK Share Hub

UU.LSE 1044 -1.5 (-0.14%)
2024-12-23 16:35:00

https://www.unitedutilities.com

United Utilities Group PLC provides water and wastewater services in the United Kingdom. It is also involved in the renewable energy generation, corporate trustee, financing, and property management activities; and provision of consulting, and project management services. The company operates 42,000 kilometers of water pipes; and 78,000 km of wastewater pipes. United Utilities Group PLC was incorporated in 2008 and is based in Warrington, the United Kingdom.

Summary

Ratios

Dividends

Income Statement

Balance Sheet

Cashflow Statement

Summary

Ratios

Dividends

Income Statement

Balance Sheet

Cashflow Statement

Discounted Cashflow Valuation:

Latest Financials: Currency:

Decide upon the free cashflow per share in year one, the amount it will grow from years 2-4, and the ongoing stable growth rate from year 5.
The default cashflow rate is that of the latest financials, the initial growth rate is the 5 year free cashflow CAGR, as is the ongoing growth rate.

Free Cashflow per Share (CF0) FCF Growth Rate (5Y CAGR) Stable Growth Rate

This allows us to calculate the projected cashflows for the next 5 years:

CF1 CF2 CF3 CF4 CF5

Next determine what return the investor requires for accepting the risk of investing in the equity.
As a default it is the risk free rate (the 10 year government bond yield) plus inflation.
Adjust these figures or use the Risk Premium field to obtain the Required Return.
Note that the Required Return needs to be higher than the Stable Growth Rate for the formula to return meaningful results.

Risk Free Rate Inflation Rate Risk Premium Required Return

Cashflows CF1 to CF4 are discounted at the Required Return and Totalled.
The Terminal Value is calculated from the cashflow in year 5, the Required Return, and the Stable Growth rate.
These two figures combined yield the Intrinsic Value under the Discounted Cashflow Method.

DCF1 DCF2 DCF3 DCF4 Total Terminal CF

As the model requires estimated inputs and can only ever be a guideline, apply a Margin of Safety to compensate.
The Net Value can then be compared to the Current Price to get an indication of whether the stock is trading at a discount or premium to Intrinsic Value.

Current Price Intrinsic Value Margin of Safety Net Value Premium or Discount %