Tuesday 16 April 2024

Why everyone should sell their United Utilities shares today

Firstly, I'd like to apologise. I feel I should have been on top of this a long time ago. I saw this tweet yesterday from waterways campaigner Feargal Sharkey.

I saw this tweet and hung my head in shame. Why? Well you see, back in the days when I had spare cash, I set up a little share portfolio. I used to listen to podcasts by a chap called David Kwo, who used to do a financial spot on  the Danny Baker morning show on BBC Radio London. He advocated an investment strategy based on investing in high yeild shares. One of his regular picks was United Utilities. He advocated it as a nice boring utility that churned out handsome dividends. I never really gave it much thought, but I bought a small holding and have had them ever since. 

Over the past few years, I've not really paid much attention to it. It has sat there, waiting for a rainy day. I cashed a lot in during lockdown, out of necessity, to pay bills, but a good proportion still remained, United Utilities being one of them. Yesterday, I was writing an episode of my Environment Monday blog and I did a search on sewage in waterways. Feargal Sharkey's tweet popped up. I was horrified. Who am I to lecture anyone, if I am making a healthy profit on owning shares in one of the worst culprits. I actually felt quite sick and annoyed with myself. 

This morning, the first thing I did when I got up, was to sell them. I am annoyed with myself not to being aware of just how bad they were. It may make you laugh to learn that they immediately shot up. If I'd waited to this afternoon, I'd have made a fair few pennies more. But to be honest, I am pleased to be shot of them.

This is the second time I've dumped a share on ethical grounds. The previous one was Capita PLC, who I dumped when they signed the Barnet Outsourcing contract. That worked rather well for me.  I'd bought them at £2.45 and sold them in November 2012 for £7.61. They are now 14p. For me, having some sort of ethics worked well. I did think that a company that didn't do the right thing was not something I wanted to be associated with. I do wonder if companies like United Utlities are a sound bet financially either. Sooner or later a government, clearly not this one, will hold them to account for the environmental damage they are doing. Once they start having to pay for cleaning up their mess, and they are banned from penalising their customers for their outlandish profits, which pay those juicy dividends David Kwo liked so much, there will be no dividends and I cannot see the share price staying so high. 

My advice would be to dump them. I don't want to be anything to do polluting our rivers, let alone profiting from it.

*** Views expressed in this blog are personal opinions and are most definitely not financial advice. 

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