Investing.com -- Shares of Severn Trent (LSE:LON:SVT) saw a modest increase of 0.2% following the company's announcement that its dividend policy for fiscal years 2026 to 2030 is set to continue as expected.
The utility company, which operates within the regulated water industry in the UK, confirmed the continuation of its existing dividend policy, which is anticipated to grow annually in line with the Consumer Prices Index including owner occupiers' housing costs (CPIH).
The company's statement provided investors with clarity, as it confirmed the acceptance of the Final Determination without the need for a Competition and Markets Authority (CMA) appeal. This acceptance offers a clear view of the regulatory environment Severn Trent will operate in over the next five years, a factor that often plays a significant role in the stability and predictability of utility stocks.
Severn Trent's announcement indicated that the dividend per share (DPS) for fiscal year 2026 is expected to be around 126p, based on the CPIH forecast for November 2024. This guidance aligns with market projections and ensures that shareholders can anticipate continued returns in line with inflation, a key consideration for investors seeking steady income from their holdings.
Analysts at Morgan Stanley (NYSE:MS) commented on the update, stating, "We expect a small positive reaction in SVT shares post the trading statement due to de-risking / clarity provided on dividend & no CMA."
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