United Utilities dividend
United Utilities paid a FY26 dividend of 53.66p per share. Real free cash flow was negative £117.4 million in FY26, so it did not cover the dividend.
How much does United Utilities pay per share?
The dividend also depends on delivery. UU paid a FY26 dividend of 53.66p per share and intends to grow dividends with CPIH inflation, but FY26 included a net ODI penalty of about £35m. The regulatory return was 13.0% against an AMP8 target of 10–11%. The price must therefore be tested against UU’s past as well as its plan.
Dividends rise with CPIH in the base case, freeze in the bear case and grow slightly faster in the bull case. The base path moves from £0.5554 to £0.5961086 by October 2029. FY26 DPS was £0.5366, and FY27 guidance is £0.5554. The history of annual increases supports the base, but investment spending and funding pressure make a freeze credible.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| EPS, diluted | 85.80 | 38.70 | 18.60 | 30.00 | -8.30 |
| − Dividends paid, per share | 52.31 | 50.34 | 46.82 | 44.03 | 43.21 |
| − Share buybacks, per share | 0.85 | 0.73 | 0.56 | 0.99 | 0.89 |
| = FCF not paid out, per share | 3.17 |
Is United Utilities' dividend covered by its cash?
The pattern is more important than any single year. Free cash flow covered shareholder payments at the start of the period, but payments exceeded it in 2023 and free cash flow became negative thereafter. Dividends were the main shareholder payment, while buybacks remained small and the table shows no acquisitions. Debt issued exceeded debt repaid in the later years, so net debt rose even as cash and short-term investments also increased.
Cash from operations was £1,381.9 million in FY26. The company then spent £1,492.1 million on capital investment. Real free cash flow, after capital spending, lease payments, interest already included in the cash-flow statement and stock-based pay, was negative £117.4 million. It was also negative £76.5 million in FY25.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| Free cash flow | -112.9 | -71.8 | -5.9 | 109.8 | 323.3 |
| − Dividends paid | 357.6 | 344.1 | 320.0 | 301.2 | 295.5 |
| − Share buybacks | 5.8 | 5.0 | 3.8 | 6.8 | 6.1 |
| = Free cash flow not paid out | 21.7 | ||||
| Paid out, % of free cash flow | not meaningful | not meaningful | not meaningful | 280.5% | 93.3% |
What could change United Utilities' dividend?
Ring-fencing means the licence protections designed to keep UUW financially and operationally able to provide the service. UUW’s directors certified that it had sufficient resources for at least the next 12 months. Ofwat also expects dividend decisions to reflect service, investment and financial resilience. The group paid £357.6 million in dividends in FY26, but that payment alone does not show that UUW had surplus cash safely available.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 780 (691 / 817) | 832 (683 / 921) | 891 (705 / 1,032) |
| Shares (millions) | 743 (748 / 743) | 743 (753 / 743) | 743 (758 / 743) |
| Dividends per share | 0.56 (0.56 / 0.56) | 0.58 (0.56 / 0.58) | 0.60 (0.56 / 0.61) |
| Price to earnings | 14.50 (12.00 / 16.00) | 14.50 (11.50 / 17.00) | 14.50 (11.00 / 18.00) |