United Utilities could use some good news

Looking ahead to next week’s figures, the water company’s shares have really struggled to perform in bullish equity markets.

Having started 2013 at 681p, the price performance of the stock has been slightly disappointing, especially when you consider that the FTSE 100 as an index is up 13% year-to-date. Of course, it is worth remembering that shareholders have benefited from a dividend yield of 5.1%. In this current climate of low interest rates, this sort of return will have been very welcome by many of the pension funds and income-dependent traders.

Utility stocks have come under a barrage of negative press coverage this year. Predominantly this has targeted the energy suppliers, but with the UK average wage rising at a  feeble pace and inflation chipping away at spending power, water supply has also been closely scrutinised. Although United Utilities has not been mentioned directly, the fact that Thames Water was blocked from making price rises that were deemed too high, and that the government has promised to take action, has attracted unwelcome political and public attention to the company.

Next Wednesday will see the firm post its latest interim results, and judging by the share price performance over the last week expectation levels are low. With equity markets being propped up by the ongoing US quantitative easing process, defensive stocks are a little less popular.

United Utilities Group plc chart

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