Severn Trent Plc (SVT) is a leading utilities-regulated water business based in the UK. Severn Trent is listed on the London Stock Exchange (LSE) and employs 6,864 staff. All prices are listed in pence sterling.
|52-week range||1914.0309p - 2606.4216p|
|50-day moving average||2324.3635p|
|200-day moving average||2418.1772p|
|Wall St. target price||1994.18p|
|Dividend yield||1.01p (4.3%)|
|Earnings per share (TTM)||47.4p|
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Valuing Severn Trent stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Severn Trent's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Severn Trent's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 49x. In other words, Severn Trent shares trade at around 49x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, Severn Trent's P/E ratio is best considered in relation to those of others within the utilities-regulated water industry or those of similar companies.
Severn Trent's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 3.67. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Severn Trent's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
However, it's sensible to consider Severn Trent's PEG ratio in relation to those of similar companies.
Severn Trent's EBITDA (earnings before interest, taxes, depreciation and amortisation) is £841.2 million.
The EBITDA is a measure of a Severn Trent's overall financial performance and is widely used to measure a its profitability.
To put Severn Trent's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||£1.8 billion|
|Operating margin TTM||27.4%|
|Gross profit TTM||£611.1 million|
|Return on assets TTM||2.93%|
|Return on equity TTM||10.12%|
|Market capitalisation||£5.6 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Severn Trent.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 16.67
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Severn Trent's overall score of 16.67 (as at 01/01/2019) is excellent – landing it in it in the 15th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Severn Trent is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare Severn Trent's total ESG risk score against those of similar companies.
Environmental score: 5.67/100
Severn Trent's environmental score of 5.67 puts it squarely in the 2nd percentile of companies rated in the same sector. This could suggest that Severn Trent is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 7.73/100
Severn Trent's social score of 7.73 puts it squarely in the 2nd percentile of companies rated in the same sector. This could suggest that Severn Trent is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 2.27/100
Severn Trent's governance score puts it squarely in the 2nd percentile of companies rated in the same sector. That could suggest that Severn Trent is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, Severn Trent scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that Severn Trent has, for the most part, managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||16.67|
|Total ESG percentile||14.88|
|Environmental score percentile||2|
|Social score percentile||2|
|Governance score percentile||2|
|Level of controversy||2|
Dividend payout ratio: 20975% of net profits
Recently Severn Trent has paid out, on average, around 20975% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 4.3% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Severn Trent shareholders could enjoy a 4.3% return on their shares, in the form of dividend payments. In Severn Trent's case, that would currently equate to about 1.01p per share.
Severn Trent's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
The latest dividend was paid out to all shareholders who bought their shares by 3 December 2020 (the "ex-dividend date").
Severn Trent's dividend payout ratio is perhaps best considered in relation to those of similar companies.
Severn Trent's shares were split on a 2:3 basis on 9 October 2006. So if you had owned 3 shares the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your Severn Trent shares – just the quantity. However, indirectly, the new 50% higher share price could have impacted the market appetite for Severn Trent shares which in turn could have impacted Severn Trent's share price.
Over the last 12 months, Severn Trent's shares have ranged in value from as little as 1914.0309p up to 2606.4216p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while Severn Trent's is 0.2554. This would suggest that Severn Trent's shares are less volatile than average (for this exchange).
To put Severn Trent's beta into context you can compare it against those of similar companies.
Severn Trent Plc operates as a water and sewerage company in England and Wales. It operates through two segments, Regulated Water and Waste Water, and Business Services. The Regulated Water and Waste Water segment offers water and waste water services to approximately 4.6 million households and businesses in the Midlands and Wales. The Business Services segment provides sludge treatment and related renewable energy generating services; and generates renewable energy from anaerobic digestion, crop, hydropower, wind turbines, and solar technology. It also provides contract services to municipal and industrial clients in the United Kingdom and Ireland; and the United Kingdom Ministry of Defense for design, build, and operation of water and waste water treatment facilities and networks, as well as services to developers. In addition, this segment manages and sells land; and offers developer, property search, and others services. The company was founded in 1974 and is headquartered in Coventry, the United Kingdom.
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