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LONDON --Severn Trent (LSE: SVT.L ) delivered a wholly uneventful report on its first-quarter activities. Water consumption declined as expected. Forecast bad debt expense remained at 2.2% for the year. Expectations for operating expenses and capital expenditure are unchanged.
Perhaps the only surprise was a joint venture with Costain (LSE: COST.L ) announced in late June, which is expected to take advantage of new government efforts to introduce competition into the country's water market. This new business is targeting high-volume commercial and industrial customers looking for a single provider for operations that may be located around the country.
However, with uncertainty swirling, the type of predictability offered by Severn Trent is just what investors are looking for -- as is the healthy dividend yield, which remains at 4.1%. Severn Trent and its fellow water utilities Pennon Group and United Utilities have seen their shares rise more than 10% since the beginning of the year, far surpassing the FTSE All-Share's 2.2% rise.
The search for certainty was one of the reasons analysts at The Motley Fool named the utility sector one of its Top Sectors for 2012. To learn more as well as to find out the other two sectors they think offer investors superior returns, download the free report today.
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