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| 21.07.25 08:03:22 |
Severn Trent PLC (LON:SVT) is favoured by institutional owners who hold 75% of the company |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Key Insights
Institutions' substantial holdings in Severn Trent implies that they have significant influence over the company's share price A total of 11 investors have a majority stake in the company with 50% ownership Recent purchases by insiders
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Every investor in Severn Trent PLC (LON:SVT) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 75% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of Severn Trent, beginning with the chart below.
Check out our latest analysis for Severn Trent LSE:SVT Ownership Breakdown July 21st 2025
What Does The Institutional Ownership Tell Us About Severn Trent?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Severn Trent already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Severn Trent, (below). Of course, keep in mind that there are other factors to consider, too.LSE:SVT Earnings and Revenue Growth July 21st 2025
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Severn Trent is not owned by hedge funds. Qatar Holding LLC is currently the company's largest shareholder with 12% of shares outstanding. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 7.4% by the third-largest shareholder.
A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Severn Trent
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data suggests that insiders own under 1% of Severn Trent PLC in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own UK£15m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 12% stake in Severn Trent. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Severn Trent better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Severn Trent , and understanding them should be part of your investment process.
Ultimately the future is most important. You can access this freereport on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 01.07.25 06:04:05 |
Returns On Capital At Severn Trent (LON:SVT) Paint A Concerning Picture |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
There are a few key trends to look for if we want to identify the next multi-bagger. Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. However, after briefly looking over the numbers, we don't think Severn Trent (LON:SVT) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
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What Is Return On Capital Employed (ROCE)?
For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Severn Trent is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.04 = UK£580m ÷ (UK£16b - UK£1.4b) (Based on the trailing twelve months to March 2025).
Therefore, Severn Trent has an ROCE of 4.0%. On its own that's a low return, but compared to the average of 3.0% generated by the Water Utilities industry, it's much better.
View our latest analysis for Severn Trent LSE:SVT Return on Capital Employed July 1st 2025
Above you can see how the current ROCE for Severn Trent compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Severn Trent for free.
So How Is Severn Trent's ROCE Trending?
In terms of Severn Trent's historical ROCE movements, the trend isn't fantastic. Over the last five years, returns on capital have decreased to 4.0% from 5.7% five years ago. On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line.
The Bottom Line On Severn Trent's ROCE
In summary, Severn Trent is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors may be recognizing these trends since the stock has only returned a total of 36% to shareholders over the last five years. Therefore, if you're looking for a multi-bagger, we'd propose looking at other options.
Story Continues
Severn Trent does have some risks though, and we've spotted 2 warning signs for Severn Trent that you might be interested in.
If you want to search for solid companies with great earnings, check out this freelist of companies with good balance sheets and impressive returns on equity.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 01.04.25 14:26:37 |
Here's Why Severn Trent (LON:SVT) Has Caught The Eye Of Investors |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Severn Trent (LON:SVT). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
Severn Trent's Improving Profits
In the last three years Severn Trent's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Outstandingly, Severn Trent's EPS shot from UK£0.42 to UK£0.77, over the last year. Year on year growth of 83% is certainly a sight to behold.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Severn Trent achieved similar EBIT margins to last year, revenue grew by a solid 5.4% to UK£2.4b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.LSE:SVT Earnings and Revenue History April 1st 2025
View our latest analysis for Severn Trent
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Severn Trent's future EPS 100% free.
Are Severn Trent Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a UK£7.6b company like Severn Trent. But we do take comfort from the fact that they are investors in the company. To be specific, they have UK£14m worth of shares. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 0.2% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
It's good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations over UK£6.2b, like Severn Trent, the median CEO pay is around UK£5.1m.
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The Severn Trent CEO received UK£3.2m in compensation for the year ending March 2024. That comes in below the average for similar sized companies and seems pretty reasonable. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.
Is Severn Trent Worth Keeping An Eye On?
Severn Trent's earnings have taken off in quite an impressive fashion. An added bonus for those interested is that management hold a heap of stock and the CEO pay is quite reasonable, illustrating good cash management. The drastic earnings growth indicates the business is going from strength to strength. Hopefully a trend that continues well into the future. Big growth can make big winners, so the writing on the wall tells us that Severn Trent is worth considering carefully. It's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Severn Trent , and understanding these should be part of your investment process.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of British companies which have demonstrated growth backed by significant insider holdings.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 16.03.25 08:09:26 |
Can Severn Trent PLC (LON:SVT) Maintain Its Strong Returns? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Severn Trent PLC (LON:SVT), by way of a worked example.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
View our latest analysis for Severn Trent
How To Calculate Return On Equity?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Severn Trent is:
13% = UK£230m ÷ UK£1.8b (Based on the trailing twelve months to September 2024).
The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each £1 of shareholders' capital it has, the company made £0.13 in profit.
Does Severn Trent Have A Good Return On Equity?
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As you can see in the graphic below, Severn Trent has a higher ROE than the average (3.7%) in the Water Utilities industry.LSE:SVT Return on Equity March 16th 2025
That's what we like to see. Bear in mind, a high ROE doesn't always mean superior financial performance. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk . You can see the 2 risks we have identified for Severn Trent by visiting our risks dashboard for free on our platform here.
How Does Debt Impact Return On Equity?
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Severn Trent's Debt And Its 13% ROE
We think Severn Trent uses a significant amount of debt to maximize its returns, as it has a significantly higher debt to equity ratio of 4.78. Its ROE is decent, but once I consider all the debt, I'm not really impressed.
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Summary
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to take a peek at this data-rich interactive graph of forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 11.02.25 05:08:36 |
With 76% ownership of the shares, Severn Trent PLC (LON:SVT) is heavily dominated by institutional owners |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Key Insights
Institutions' substantial holdings in Severn Trent implies that they have significant influence over the company's share price 50% of the business is held by the top 10 shareholders Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
Every investor in Severn Trent PLC (LON:SVT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 76% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of Severn Trent.
See our latest analysis for Severn Trent LSE:SVT Ownership Breakdown February 11th 2025
What Does The Institutional Ownership Tell Us About Severn Trent?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Severn Trent. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Severn Trent, (below). Of course, keep in mind that there are other factors to consider, too.LSE:SVT Earnings and Revenue Growth February 11th 2025
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Severn Trent. Qatar Holding LLC is currently the company's largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.9% and 7.4% of the stock.
On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Story Continues
Insider Ownership Of Severn Trent
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Severn Trent PLC in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own UK£13m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Severn Trent you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 24.01.25 11:01:42 |
Severn Trent to increase shareholder dividends as water bills rise |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Water giant Severn Trent has said it plans to hand shareholders a higher dividend for the next year as trading remains in line with targets.
It said its financial performance up to January 23 “remains on track”, with it set to meet its guidance for the full financial year.
As a result, the company said it expects to hand out a dividend of 126.02p to shareholders for the 2025/26 financial year.
The company said this is an inflation-based increase from the 121.71p dividend it already announced for the current financial year.
The increase comes amid significant scrutiny over the level of payouts in the sector, against a backdrop of rising customer bills and concerns over leaks.
Last month, regulator Ofwat fined troubled Thames Water £18.2 million for paying £158.3 million in dividends to shareholders which it said were not justified.
Severn Trent said it has proposed the increased dividend after considering the final determination which was revealed by the regulator last month.
In the final determination, Ofwat said that Severn Trent will be able to increase customer bills by an average of 47% over the next five years.
The company said the bill rise will help its efforts to halve spills by 2030, reduce pollution by 30% and reduce leakage by a further 16%.
On Friday, Severn Trent also reported that it expects a £100 million benefit from outcome delivery incentives (ODIs) for 2024, a regulatory framework which rewards firms which meet performance targets but compensates customers for firms who miss these targets.
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| 21.01.25 12:04:29 |
Here's What's Concerning About Severn Trent's (LON:SVT) Returns On Capital |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Severn Trent (LON:SVT) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
What Is Return On Capital Employed (ROCE)?
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Severn Trent:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.038 = UK£540m ÷ (UK£15b - UK£818m) (Based on the trailing twelve months to September 2024).
So, Severn Trent has an ROCE of 3.8%. In absolute terms, that's a low return, but it's much better than the Water Utilities industry average of 3.1%.
View our latest analysis for Severn Trent LSE:SVT Return on Capital Employed January 21st 2025
In the above chart we have measured Severn Trent's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Severn Trent for free.
What Can We Tell From Severn Trent's ROCE Trend?
In terms of Severn Trent's historical ROCE movements, the trend isn't fantastic. Over the last five years, returns on capital have decreased to 3.8% from 5.8% five years ago. However it looks like Severn Trent might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line.
In Conclusion...
In summary, Severn Trent is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Unsurprisingly, the stock has only gained 18% over the last five years, which potentially indicates that investors are accounting for this going forward. As a result, if you're hunting for a multi-bagger, we think you'd have more luck elsewhere.
On a final note, we've found 2 warning signs for Severn Trent that we think you should be aware of.
Story Continues
For those who like to invest in solid companies, check out this freelist of companies with solid balance sheets and high returns on equity.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 01.01.25 05:08:22 |
Severn Trent (LON:SVT) shareholders have endured a 3.2% loss from investing in the stock three years ago |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Severn Trent PLC (LON:SVT) shareholders, since the share price is down 15% in the last three years, falling well short of the market decline of around 10.0%.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Severn Trent
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During five years of share price growth, Severn Trent moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. So given the share price is down it's worth checking some other metrics too.
Given the healthiness of the dividend payments, we doubt that they've concerned the market. We like that Severn Trent has actually grown its revenue over the last three years. If the company can keep growing revenue, there may be an opportunity for investors. You might have to dig deeper to understand the recent share price weakness.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).LSE:SVT Earnings and Revenue Growth January 1st 2025
Severn Trent is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this freechart depicting consensus estimates.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Severn Trent the TSR over the last 3 years was -3.2%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Severn Trent shareholders are up 3.2% for the year (even including dividends). But that was short of the market average. If we look back over five years, the returns are even better, coming in at 4% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Severn Trent (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.
Story Continues
For those who like to find winning investments this freelist of undervalued companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 19.12.24 11:35:04 |
Trending tickers: Nvidia, Micron, Coinbase, Nissan and Severn Trent |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Nvidia (NVDA)
Shares in Nvidia surged as much as 4.8% on Wednesday on the back of analysts reiterating "buy" ratings on the chipmaker.
However, the stock then fell in US afternoon trading on Wednesday, ending the day around 1% in the red. This came amid a broader decline in US markets, after the Federal Reserve signalled that there would be fewer interest rate cuts in 2025 than previously projected.
The Fed cut rates by 0.25% on Wednesday, as anticipated. However, Fed chair Jerome Powell said: "The slower pace of cuts for next year really reflects both the higher inflation readings we had this year and the expectation inflation will be higher."
Read more: FTSE 100 LIVE: Markets follow US lower as Bank of England expected to hold interest rates
Nvidia's stock has since rebounded in pre-market trading, rising 2%. The stock looks on course for a comfortable triple-digit percentage gain once again in 2024.
A key contributor to this rise has been the hot demand for its AI Blackwell chip, which only started being shipped in the final quarter of the year.
“Technically, Blackwell is a beast,” Matt Kimball, an analyst at Moor Insights & Strategy, told Yahoo Finance in an email. He added that the graphics processing unit was an "exponential leap forward".
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At close: January 16 at 4:00:01 PM EST Advanced Chart
Micron Technology (MU)
Another chipmaker in focus is Micron, with shares down 16% in pre-market trading on Thursday, after second-quarter guidance missed estimates.
The memory chipmaker posted revenue of $8.71bn (£6.89bn) for the first quarter, which was in line with analyst estimates. Micron also reported an adjusted earnings beat of $1.79 per share.
Read more: Pound, gold and oil prices in focus: commodity and currency check, 19 December
However, the company's second-quarter forecast of $8.1bn in revenue on the high end fell short of Wall Street's expectation of $8.99bn.
Ben Barringer, technology analyst at Quilter Cheviot, said: "The PC and smartphone side of the business has performed poorly, but its AI datacentre demand has been good.
"Nonetheless, the memory industry is incredibly sensitive to supply and demand imbalance, and at the moment supply appears to be exceeding demand in some areas."
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At close: January 16 at 4:00:01 PM EST Advanced Chart
Coinbase (COIN)
Bitcoin (BTC-USD) fell on Wednesday after Powell said that the Fed was not able to hold the cryptocurrency, which was something the central bank was not seeking to change.
"We're not allowed to own bitcoin," Powell said in a press conference following the Fed's interest rate decision.
As for the legal issues of holding bitcoin, Powell said that this was the "kind of thing for Congress to consider, but we are not looking for a law change at the Fed", according to Reuters.
Story Continues
Stocks: Create your watchlist and portfolio
Bitcoin had fallen back to $101,815 on Thursday morning, having topped $108,000 on Tuesday. Cryptocurrency exchange platform Coinbase, which is consider a proxy stock for the digital tokens, closed Wednesday's session 10% in the red.
Powell's comments come ahead of president-elect Donald Trump's return to the White House in January, after having won the US election last month. Trump said in his election campaign that he planned to make the US the global capital for cryptocurrency and he'd create a national stockpile of bitcoin.
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Nissan (7201.T)
Shares in carmaker Nissan continued to rise on Thursday, closing the session in Tokyo up 6.5%.
The stock jumped 24% in the previous session following reports that it was set to start merger talks with Honda (HMC).
According to a report from Nikkei Asia, the two carmakers are planning to begin talks with the hope of joining their resources amid increasing competition in the electric vehicle (EV) space.
Read more: Stocks that are trending today
The carmakers are considering operating under a holding company and may look for an eventual three-way tie-up with Mitsubishi (8058.T), the report said.
A spokesperson for Nissan said: "The content of the reports that Honda, Nissan and MMC are considering a business integration is not based on an announcement from our company.
"As announced in March and August of this year, Nissan, Honda, and MMC are considering various possibilities for future collaboration including the content of the report, but no decisions have been made."
A spokesperson for Honda said: “Media reports that Honda, Nissan and Mitsubishi are considering a business integration are not based on an announcement from our company."
Severn Trent (SVT.L)
Water companies Severn Trent and United Utilities (UU.L) were the top risers in the FTSE 100 (^FTSE) on Thursday morning, up nearly 2% and 1% respectively.
This came after the UK water industry regulator Ofwat announced that it had approved a £104bn ($131bn) upgrade to accelerate delivery of cleaner rivers and seas.
However, to help fund these upgrades, it said that the average water bill would rise by 20% to £86 next year, though there would be smaller percentage increases in the following four years.
Read more: Are there any major UK companies ripe for takeover bids in 2025? Have your say
Russ Mould, investment director at AJ Bell, said: "This news may not trigger a flood of new buyers for water company shares given a lot of the increase in bills will go towards investing in creaking infrastructure.
"After all, with bills going up but problems around sewage spills and water outages continuing at current levels, some will feel this doesn’t appear a sustainable state of affairs."
Severn Trent said that it had been given the green light for a £15bn investment programme to improve its services and boost river health.
Other companies in the news on Thursday 19 December:
Amazon (AMZN)
Baidu (9888.HK)
Serco (SRP.L)
Carnival (CCL)
Darden Restaurants (DRI)
CarMax (KMX)
BlackBerry Limited (BB)
Read more:
Bank of England set to hold interest rates at 4.75% Stocks to watch this week: Nike, Micron, Accenture, FedEx and Birkenstock UK inflation rises to 2.6% in November
Download the Yahoo Finance app, available for Apple and Android.
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| 10.12.24 08:46:12 |
Institutional shareholders may be less affected by Severn Trent PLC's (LON:SVT) pullback last week after a year of 1.8% returns |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Key Insights
Significantly high institutional ownership implies Severn Trent's stock price is sensitive to their trading actions 52% of the business is held by the top 12 shareholders Recent sales by insiders
If you want to know who really controls Severn Trent PLC (LON:SVT), then you'll have to look at the makeup of its share registry.The group holding the most number of shares in the company, around 74% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors was the group most impacted after the company's market cap fell to UK£7.8b last week.However, the 1.8% one-year returns may have helped alleviate their overall losses.But they would probably be wary of future losses.
In the chart below, we zoom in on the different ownership groups of Severn Trent.
See our latest analysis for Severn TrentLSE:SVT Ownership Breakdown December 11th 2024
What Does The Institutional Ownership Tell Us About Severn Trent?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Severn Trent already has institutions on the share registry. Indeed, they own a respectable stake in the company.This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does.It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Severn Trent, (below). Of course, keep in mind that there are other factors to consider, too.LSE:SVT Earnings and Revenue Growth December 11th 2024
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences.Hedge funds don't have many shares in Severn Trent.Our data shows that Qatar Holding LLC is the largest shareholder with 12% of shares outstanding.In comparison, the second and third largest shareholders hold about 8.3% and 5.3% of the stock.
After doing some more digging, we found that the top 12 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing.Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Story Continues
Insider Ownership Of Severn Trent
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that Severn Trent PLC insiders own under 1% of the company.It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own UK£14m worth of shares (at current prices).It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Severn Trent.While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
Private equity firms hold a 12% stake in Severn Trent. This suggests they can be influential in key policy decisions.Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Severn Trent better, we need to consider many other factors.Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Severn Trent (of which 2 don't sit too well with us!) you should know about.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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