Severn Trent (SVTRF) & Its Competitors Critical Review

Severn Trent (OTCMKTS:SVTRF) is one of 38 publicly-traded companies in the “Water Utilities” industry, but how does it weigh in compared to its peers? We will compare Severn Trent to related companies based on the strength of its valuation, earnings, analyst recommendations, institutional ownership, risk, dividends and profitability.

Profitability

This table compares Severn Trent and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Severn Trent	N/A	N/A	N/A
Severn Trent Competitors	4.76%	3.19%	2.01%

Analyst Ratings

This is a summary of recent recommendations for Severn Trent and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Severn Trent	0	1	0	0	2.00
Severn Trent Competitors	403	1210	1005	29	2.25

As a group, “Water Utilities” companies have a potential upside of 89.90%. Given Severn Trent’s peers stronger consensus rating and higher probable upside, analysts plainly believe Severn Trent has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Severn Trent and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Severn Trent	N/A	N/A	48.86
Severn Trent Competitors	$4.34 billion	$270.20 million	15.34

Severn Trent’s peers have higher revenue and earnings than Severn Trent. Severn Trent is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

37.3% of Severn Trent shares are owned by institutional investors. Comparatively, 57.7% of shares of all “Water Utilities” companies are owned by institutional investors. 7.7% of shares of all “Water Utilities” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Severn Trent pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Severn Trent pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Water Utilities” companies pay a dividend yield of 4.1% and pay out 84.1% of their earnings in the form of a dividend. Severn Trent lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Severn Trent peers beat Severn Trent on 12 of the 13 factors compared.

Severn Trent Company Profile

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 4.8 million households and businesses. The Business Services segment generates renewable energy from anaerobic digestion, hydropower, wind turbines, and solar panels; property development; and offers affinity products and search services. It also provides services to municipal and industrial clients, including the Ministry of Defence and the Coal Authority for design, build, and operation of water and wastewater treatment facilities and networks. Severn Trent PLC was founded in 1974 and is headquartered in Coventry, the United Kingdom.