According to sources, he’s committed to the existing fiscal rules.

That adds some comfort, but other changes may still arise. Chatter suggests the tax debate could shift towards wealth, assets, and investment income — which is where ISA investors should pay attention.

So what do investors need to know if he does become Prime Minister?

Direct changes unlikely

At present, there’s no clear sign that Burnham wants to tear up the basic ISA wrapper. The annual allowance remains £20,000 across all ISAs for 2026/27, so the tax-free shelter is still a major part of the UK savings system.

The bigger risk is gradual tinkering. In practice, a government that wants extra revenue could lower allowances or tighten rules for higher earners, even if that’s not Burnham’s stated priority.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What is his tax philosophy?

Andy Burnham’s clearest clue is his own language. He’s said:

“We over-tax labour, people’s work, and we under-tax people’s assets”.

That’s important for investors because it points to a system that could lean harder on wealth, property, dividends, and capital gains. 

In plain English, I would read that as bad news for assets held outside tax shelters, and better news for people who hold assets in an ISA.

A useful way to think about it is this:

• Cash and shares inside an ISA should stay protected from CGT and dividend tax.
• Investments outside an ISA are more exposed if CGT is reviewed or pushed higher.
• Property-heavy or dividend-heavy portfolios could feel more pressure than salary income.

Which sectors look vulnerable?

Andy Burnham’s politics lean toward stronger state intervention, so utilities are one area I would watch closely. Severn Trent (LSE:SVT) is a good example.

Its preliminary FY26 results showed revenue of £2.83bn, up 16.6%, and net profit of £371m, while the full-year dividend rose 3.5% to 126.02p per share.

Newly-appointed CEO James Jesic said it had “been another year of exceptional growth” during the company’s February trading update.

But the balance sheet is still heavily geared. With about £10.7bn of debt and £1.8bn of equity, it’s sensitive to tougher regulation or tighter price controls.

The utility company, which supplies water to 8 million people across the UK, also says its dividend policy is to grow by CPIH each year.

That mix can work in stable conditions, but is less forgiving if the political mood turns harder. 

What investors should watch

For British investors, my simple view is this: an ISA still looks like one of the best defensive wrappers in a Burnham-led Labour era. If tax shifts toward wealth, the shelter becomes more valuable, not less.

But I would be more cautious about concentrated holdings in regulated UK utilities, especially if the policy tone becomes more interventionist.

In short, should Andy Burnham enter No.10, it may be wise to consider reducing positions in utility stocks like Severn Trent.

Fortunately, there are several other FTSE 100 stocks that could benefit from his tenure.

Should you invest £5,000 in Severn Trent Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Severn Trent Plc made the list?

Mark Hartley does not hold any positions in the companies mentioned.

The post Here’s what you need to know about how Burnham policies might impact your Stocks and Shares and ISA appeared first on The Twelfth Magpie.

That prospect now looks nailed on after current PM Keir Starmer just said he will step down. The question now is, which UK sectors and stocks could win or lose from this incoming premiership?

Potential losers

Now, the first thing to note is that we don’t know for certain what the next likely PM will do. But looking at previous comments from Burnham, a couple of key themes stand out. He has mentioned the need for:

• Public control of utilities, citing Thames Water as an example.
• Iincreasing public infrastructure investments, particularly around social housing. 

Potential losers then could be water utilities, which Burnham has cited as private sector failures. Rising water bills and, in some instances, sewage being pumped into lakes and rivers haven’t made these firms very popular with the public.

Therefore, it’s entirety possible such utilities could be re-nationalised in future. The water industry in England and Wales was privatised in 1989.

United Utilities (LSE:UU) and Severn Trent (LSE:SVT) are two water stocks from the FTSE 100. They provide water services to approximately 15m customers across certain parts of England.

Of course, nationalising utilities would require legislation and likely be a multiyear process. Acquiring these debt-laded firms would not be straightforward and the policy could be scrapped in 2029 if a different government is elected.

Therefore, the market doesn’t seem overly concerned, as these water stocks have only dropped between 6% and 8% since the end of May. They’re sporting forward dividend yields of 4.6% (Severn Trent) and 4.3% (United Utilities).

Are they worth a look if they keep falling? Potentially, due to their regulated earnings, steady dividends, and defensive profile. That said, they have big debts, long-term growth is limited, and their dividends tend to rise about in line with inflation.

I doubt these FTSE 100 income shares will be derailed. But they’re not on my radar, especially with the added element of uncertainty.

Potential winner

Turning to potential winners, UK construction and infrastructure services group Morgan Sindall (LSE:MGNS) strikes me as a strong candidate. That’s because it generates revenue from public sector work, including affordable housing and property services for social housing.

Its subsidiary Muse specialises in urban regeneration, including town centre transformations of Eccles (Salford) and Wythenshawe (Manchester). Burnham’s old stomping ground.

The FTSE 250 stock has been strong for ages — up 112% since mid-2021 — and last year showed why. The company’s revenue increased by 10% to a record £5,019m, while pre-tax profit jumped 35% to £233m.

Morgan Sindall’s balance sheet is in good shape and the total dividend was hiked 20% to 158p last year. At the current share price, this translates into a 3.3% dividend yield.

A sluggish private housing market amid high inflation and rates adds risk to growth moving forward. But the stock doesn’t look overly expensive at 13 times earnings.

If so-called ‘Manchesterism’ — described as “business-friendly socialism” by Burnham — takes off nationally, then Morgan Sindall should benefit. On this basis, I reckon this dividend stock’s worth a closer look.  

Should you invest £5,000 in United Utilities Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if United Utilities Group Plc made the list?

Ben McPoland has no position in any of the companies mentioned. 

The post Could Andy Burnham derail these FTSE passive income stocks? appeared first on The Twelfth Magpie.

Here I want to talk about three specifically, and what makes them such formidable passive income providers. The names in question are BAE Systems (LSE:BA.), Standard Life (LSE:SDLF), and Seven Trent (LSE:SVT).

Let’s take a look.

Dividend quality

Each of these firms enjoys strengths that make them perfect dividend powerhouses. With BAE Systems, these factors include:

• A focus on defence, where long-term demand remains stable.
• Tier 1 supplier status with huge defence spenders (including the US and UK).
• Huge barriers to entry, which limits competitive threats.
• A diverse product range, protecting profits from slowdown in one or two areas.
• Growing geopolitical uncertainty, which is driving global defence budgets.

Standard Life has its own distinct set of advantages, such as:

• Capital-light operations and a focus on acquiring ‘closed’ life insurance and pension policies.
• Predicable cash generation from in-force policies and investment returns.
• Asset portfolios that are tightly hedged against interest rate moves.
• Robust capital reserves (its Solvency II ratio today is 176%)
• Strong growth in the retirement and savings markets.

Great records

Severn Trent, meanwhile, benefits from:

• Operating in an ultra-defensive industry (water supply).
• A monopoly in the Midlands region of the UK, eliminating competitive dangers.
• Multi-year regulatory periods that provide long-term earnings visibility.
• A strong record of operational efficiency, limiting costs.
• A growing asset base that leads to increased dividends.

So how have these qualities translated into dividends down the years? Let’s take a look.

Over the past decade, dividend yields have beaten — or been at the upper end of — the FTSE 100 average of 3%-4%. Standard Life’s yield has delivered a yield roughly double that level.

These FTSE stocks have also navigated major shocks to keep growing their dividends. During the Covid pandemic, for instance, they continued raising payouts, a period when roughly half of Footsie companies experienced some disruption.

Can they keep delivering?

But here’s the thing. Past dividend performance isn’t always a reliable guide to future. With BAE Systems, earnings could suffer if defence-related supply chain issues worsen, impacting dividend growth.

Rising competition in pensions and annuities might hit Standard Life’s future payouts. And as for Severn Trent? The company’s profits could take a hit if interest rates rise and borrowing costs shoot up.

However, no share is without risk. And on balance, I fully expect these FTSE 100 stocks to keep offering excellent dividend yields and payout growth. Their resilient business models and strong cash generation make them excellent income shares to consider.

The post How do these FTSE 100 stocks keep paying brilliant dividends? appeared first on The Twelfth Magpie.

But here’s the thing: some top FTSE 100 shares offer a brilliant blend of growth, income, and value for money. Severn Trent (LSE:SVT), HSBC (LSE:HSBA) and Legal & General (LSE:LGEN) are three such stocks I’m considering for my own ISA and think others could too. Read on to find out more.

All-round value

Utilities stocks aren’t famed for their explosive growth potential. But Severn Trent provides this in spades, its long-term £15bn investment programme rapidly expanding its asset base and ability to raise profits.

Is this reflected in the company’s valuation? I think not — its forward price-to-earnings growth (PEG) ratio sits just inside value territory of 1 and below, at 0.9. City analysts expect earnings to surge 18% this financial year.

With Severn Trent’s dividend yield at 4.2% it offers plenty of bang for your buck, in my view.

What I also like is that the water supplier’s operations are highly defensive, providing strong earnings visibility. Remember that rising interest rates could push borrowing costs higher, though.

Another top bargain?

HSBC is enjoying brilliant momentum as its emerging markets rapidly grow. Analysts have been steadily raising their earnings and share price forecasts following the bank’s forecast-beating Q4 performance. I think this could continue.

Right now earnings are tipped to rise 12% in 2026. It reflects the strong performance of the bank’s ongoing restructuring programme, along with its huge structural opportunities in Asia. RBC analysts, for instance, note that “Asian wealth is a key growth area for HSBC which should continue to grow other income over the medium term.”

HSBC’s forward PEG ratio is also an ultra-low 0.4. And its dividend yield for 2026 is 4.6%, beating the 3% average for FTSE 100 stocks. Asia’s traditional banks like this are facing increasing competitive threats. Yet this remains a top blue-chip to consider.

FTSE-leading dividend yield

Legal & General is one of the FTSE 100’s best-priced dividend stocks, in my view. Its forward price-to-earnings (P/E) ratio is 8.7 times, while its PEG is 0.9. Meanwhile, the dividend yield for this year is the index’s highest, at 8.8%.

Low earnings multiples and sky-high yields are sometimes a red flag for investors. It can often be a sign of a company in difficulties, or that a dividend cut could be imminent. Is this a category Legal & General shares fall into?

I believe not. Firstly, the company is highly cash generative and has a large capital pile. Its Solvency II capital ratio remains an enormous 210%, underpinning current dividend projections. It also has significant growth levers to pull, as an ageing global population drives financial products demand.

Legal & General’s earnings are tipped to rise 10% in 2026. I’m optimistic about these forecasts, though the fallout of the Iran War creates some uncertainty.

The post 3 FTSE 100 stocks I’m considering for growth, value AND dividends! appeared first on The Twelfth Magpie.

High debt levels and maintenance costs make these stocks unpopular with investors. But I don’t think they should be so quick to dismiss these potential opportunities.

Water utilities

Water companies are generally extremely unpopular with customers. But while most people see constant burst pipes and bills that keep going up, there’s a lot more to it than this. 

Demand is incredibly resilient even in a downturn. And regulation means customers don’t have any way of switching to another provider, so competition is non-existent.

The downside is that companies don’t get to set their own prices. These are determined by sector regulator Ofwat, which means that profits are limited despite the lack of competition. Not being able to control their own pricing is a risk. But when the regulators are on their side, water utilities – especially good ones – can be very reliable cash generators.

Debt and equity

Investors are often wary of these businesses for a couple of reasons. One is the amount of debt they have and the effects of inflation on their maintenance costs.

Severn Trent‘s (LSE:SVT) a good example of both. In terms of its balance sheet, a debt-to-equity ratio of 6 is one of the highest in the FTSE 100.

On top of this, the firm has around £14bn in fixed assets that it’s legally required to maintain. That’s roughly the same as AstraZeneca – which generates almost 25 times the revenues.

Both of those are reasons investors often don’t give the company a second thought. But I think that anyone who moves on without at least taking a closer look might be making a mistake.

Protection

The regulated nature of Severn Trent’s business means its profits are limited. But it also removes a lot of the risks associated with high debt levels and maintenance costs.

As long as the allowed return stays above the company’s borrowing costs, more debt should actually mean higher profits. Investments add to the asset base the firm can earn a return on.

Importantly, Ofwat named Severn Trent’s business plan for 2025-2030 as ‘Outstanding’. As a result, it’s allowed return is 4.33%, rather than 4.03% water utilities are able to earn by default.

Investors should also note that this is a real return. So if inflation increases, the firm should get a higher return on a bigger equity base as the value of its assets goes up.

Durability

Severn Trent has a good case for claiming to be the FTSE 100’s most underrated company. Investors who only see high debt and heavy maintenance costs might be missing out.

In a regulated industry, there’s always a risk allowed returns might contract in future. But Ofwat also has a strong incentive to allow operators to make a decent return.

That’s especially true of the best in the business, which includes Severn Trent right now. So I think that investors – especially those looking for passive income – should take a closer look.

The post The most underrated stock in the FTSE 100? appeared first on The Twelfth Magpie.

But what are the ‘right’ shares?

Well, in all honesty, there’s no definitive list of correct shares for such an endeavour. And the fact that the goal posts are constantly changing doesn’t help. Fluctuating interest rates, political instability and foreign tariffs all play a part in where share prices go daily.

That’s why the ideal shares are those that keep a steady head even when times get tough. If your investment outlook is 10 to 20 years (and it should be), then you need shares that will survive the journey.

With that in mind, I’ve identified two dividend shares on the FTSE 100 that have a super-reliable history. Whether preparing for retirement or saving up for a house, I think both are well worth considering.

Unilever

Despite a typically moderate yield, Unilever (LSE: ULVR) is popular for passive income because of its exceptional dividend track record. Spanning nearly a century, it’s paid dividends consistently since 1929, with almost 20 years of uninterrupted growth before Covid.

That alone is impressive — but the real attraction is its resilience to market downturns. Even during the most severe economic downturns (the Great Depression, World War II, the 2008 Financial Crisis, and Covid), Unilever maintained its dividend payments.

The reason for this is the company’s recession-resistant business model. Selling essential goods like food, personal care, and household products means its revenues flow regardless of economic conditions.

It’s worth noting, there’s a risk of unexpected currency fluctuations affecting dividend payments, as Unilever reports in both sterling and euros. Furthermore, its global diversification means returns are at risk from political instability, currency crises and economic volatility.

Still, history has shown it’s one of the most stable of FTSE 100 dividend stocks.

Severn Trent

When thinking of a good utility stock for income, many people turn to National Grid. But while the nation’s core energy grid operator is a great option, Severn Trent (LSE: SVT) actually has a better dividend track record.

What’s more, it’s also performed slightly better over the past 20 years.

Similar to National Grid, Severn Trent is a regulated utility company serving approximately 4.7m households and businesses across the Midlands and Wales. As a regulated monopoly, the company benefits from predictable, inflation-linked revenue streams with minimal competition.

While nowhere near Unilever’s record, in its 20-year-long history, it’s done surprisingly well. Despite two minor dividend reductions in the past 20 years, overall, dividends have grown at an average rate of 3.53% per year. For example, the company increased dividends from 81p in 2016 to £1.19 in 2024 — approximately 47% growth over eight years.

Another bonus of regulation adds provisions for inflation indexation, ensuring dividend payments keep pace with rising costs. And the essential need for water means revenue remains stable regardless of economic conditions.

But there is one elephant in the room that can’t be ignored: £8.65bn in debt. At that level, even a regulated business is at risk of defaulting — or at least cutting dividends.

Still, with a long-term view, I expect debt will come under control and the company will continue delivering stable income to shareholders.

The post 2 low-risk, high-yield FTSE 100 shares to consider for 2026 appeared first on The Twelfth Magpie.

30-year gilts – bonds issued by the UK government – have a 5.47% yield and are very low-risk. There’s a lot to like, but I think investors looking for extra income should aim to do better with a Stocks and Shares ISA.

Gilts

Gilts offer a straightforward way of earning passive income. They pay a fixed return each year until they mature unless the UK government goes broke, which seems unlikely.

To say the current yield is unusually high is an understatement. The last time investors were able to get this type of return from a 30-year gilt was May 1998. 

It’s definitely fair to say that opportunities like this don’t come around every year – or even every decade. But while the threat of a default is low, there are other important risks to consider.

The big issue is inflation, which is a risk for assets that provide fixed returns. Over the next 30 years, the cost of living is likely to go up, but gilt returns won’t increase to offset this.

If inflation averages 2.5% per year over the next three decades, £1,094 will buy about half as much stuff in 2055 as it does today. That’s a problem for investors seeking long-term returns.

To offset this, investors need to think about assets that can generate more income over time. And dividend stocks could be a good example. 

Dividend stocks

Water utility Severn Trent (LSE:SVT) is an interesting dividend stock. The current yield is 4.5%, but it’s worth noting that the firm’s distributions have risen by 3.6% a year over the last decade.

That’s more than enough to offset the effects of inflation, but the stock isn’t exactly popular with investors. And with a high debt level and a rising share count, it’s easy to see why.

These are the results of various investments in infrastructure. But while the amount Severn Trent is allowed to charge customers is regulated, it does include a return on these expenses.

The allowed rate of return is reviewed by Ofwat every five years and the real risk is that it might be decreased at the next review in 2030. And there isn’t much the company can do about this. 

Ultimately though, disincentivising investments in water infrastructure isn’t really in anyone’s interest. It eventually leads to bigger problems, which results in higher bills for customers.

Regulation is a genuine risk for Severn Trent. But I don’t think it’s one that investors – especially those looking for passive income – should see as an automatic deal-breaker. 

Long-term income

Turning £20,000 into £1,094 per year for 30 years by buying bonds doesn’t seem like a bad idea. And in some ways it isn’t – it’s a long time since that kind of return was available.

Over time however, the effects of inflation are a big concern. So I think investors looking at gilts should consider buying stocks like Severn Trent instead.

The starting yield is lower. But the long-term effects of inflation on the bond returns and the potential for dividend growth means I think it’s a much more attractive option.

The post Here’s how a £20k ISA could earn £1,094 in passive income every year until 2055 appeared first on The Twelfth Magpie.

The move suggests renewed investor confidence after a long period of cautious sentiment.

What’s driving the rally?

A key factor behind the FTSE’s recovery has been the easing of global trade tensions. Markets were rattled earlier this month by the announcement of US trade tariffs on the UK — but recent statements from Washington suggest a softer stance. Nothing is set in stone, of course. But as fears subside for now, investor appetite for risk has increased, benefitting large-cap UK stocks with international exposure.

Additionally, the Footsie’s heavy weighting in commodities, banking and defensive sectors has made it an appealing option amid persistent global economic uncertainty. A weaker pound has also helped UK multinationals by making their overseas earnings more valuable when converted back into sterling.

Sectors that are leading the charge include consumer staples, utilities and housing. The top two, which investors may want to consider, include Severn Trent (LSE: SVT) and J Sainsbury (LSE: SBRY).

Severn Trent

One of the standout performers over the past week is Severn Trent, which has climbed 9.25%. The utility firm, which supplies water and waste services across the Midlands and Wales, offers an attractive 4.3% dividend yield. This can provide a defensive cushion during uncertain economic periods.

Unfortunately, the price surge pushed up its price-to-earnings (P/E) ratio to 23, so the price may be slightly overvalued now. Plus, it carries notable debt levels – over £6.8bn – raising concerns in a higher interest rate environment. Regulatory scrutiny and environmental challenges are also ongoing risks for water utilities.

On the plus side, its regulated model provides stable cash flows and supports reliable dividend payouts. Its most recent earnings report showed underlying profit before tax rising to £25m, underpinned by consistent customer demand.

J Sainsbury

Supermarket giant J Sainsbury has seen its share price jump 8% in the last seven days, buoyed by solid sales growth and improved margins.

In its recent full-year results, the retailer reported a 7.6% increase in underlying profit to £70m, and maintained its dividend payout, yielding around 5%. It has also gained market share as shoppers respond positively to price cuts and loyalty incentives through its Nectar programme.

Yet it operates in a fiercely competitive grocery sector, facing pressure from Aldi and Lidl at one end and Tesco at the other. Profit margins remain tight, and cost pressures such as wage increases, pension liabilities and supply chain challenges could squeeze earnings. 

On the plus side, it has a low P/E ratio of 10.8, suggesting the price has sufficient room to grow.

Looking ahead

With momentum on its side, the FTSE 100 could now push towards new record highs. That is, if inflation continues to ease and the Bank of England’s (BoE) highly anticipated interest rate cuts materialise. 

However, much will depend on economic data and central bank policy decisions on both sides of the Atlantic. While technical indicators remain bullish in the short term, investors should remain cautious of potential volatility.

The post The FTSE 100 enjoys its best run in 2 years! These top UK stocks are leading the charge appeared first on The Twelfth Magpie.

Thinking it all through

Short-term UK Government bond yields have dropped sharply. When I look at UK index swaps, the implied UK interest rate for the end of this year indicates that the market expects four 0.25% rate cuts. This ties in with some analyst expectations I’ve seen. Some looking for three or more rate cuts from the Bank of England committee.

The shift in expectations shouldn’t come as a surprise. It’s because of the recent US tariff announcement. The potential shock that this could cause to both the global economy and the UK economy means that some investors are getting a bit spooked. This is evident from the fall in the FTSE 100 and is also reflected in the bond market.

However, the increased likelihood of sharp rate cuts later this year could act as support in the coming months for the stock market. Lower interest rates help boost economic growth. They provide people with less incentive to save and more to spend. For companies, it means that loans and new debt become cheaper. This can be used to help fuel expansion and new projects. Although it isn’t always the case, cutting interest rates is usually followed by a growth period in the economy and a rising stock market.

A British case study

In order to find stocks for my watchlist, the main criteria here is finding ideas that could benefit the most from a big drop in the base rate. One that is worth investor consideration is Severn Trent (LSE:SVT). The water and wastewater service provider operates mainly in the Midlands and Wales.

Over the past year, the stock has risen 6%. Operations are relatively straightforward, but the company has a high debt load due to infrastructure spending projects. Some might see this as a risk. The latest half-year results showed that net financing costs for debt totalled £124.6m! The revenue for this period was just over £1.2bn, so a good chunk of this went towards servicing the cost of finance.

However, a reduction in the base rate would lower the cost of debt and could boost investor optimism. The improved cash flow may mean some of the money could be used to pay down some borrowings or put towards other growth opportunities.

Further, Severn Trent only operates in the UK. Therefore, it’s not exposed to US tariffs in the same way that more international FTSE 100 companies could be.

If we start to hear more chatter about rate cuts becoming a reality, I think it could act to spark a relief rally in the market, boosting stocks like Severn Trent.

The post Analysts now expect up to 4 UK rate cuts this year! Here’s what it could mean for the FTSE 100 index appeared first on The Twelfth Magpie.

While the FTSE 100 is down nearly 11.5% over the last week, two quiet achievers have managed to climb almost 5% each. 

In turbulent times like these, that kind of resilience grabs my attention. Especially when it’s from a sector I’ve ignored for years: water utilities.

Utilities have long been seen as classic defensive stocks. People don’t suddenly stop turning on the taps or boiling the kettle during a downturn. Their earnings are typically regulated too, which can help smooth the financial ride.

Of course, they’re not perfect. Utilities tend to lag in boom times and often carry high levels of debt. 

In today’s world of elevated interest rates, that means bigger borrowing costs. It also makes their dividends look less appealing compared to the return on cash and bonds, which carry little or no capital risk.

Even so, these two water giants have defied the market panic

United Utilities is this week’s biggest winner

United Utilities (LSE: UU) is the best performer on the FTSE 100 over the past week, the shares jumping 4.9%. Over 12 months, it’s barely moved (up less than 1%), but over five years, it’s climbed 25%.

That’s before factoring in its dividend, which currently yields a tempting 4.88%. Last year, it hiked the dividend by 9.4% to 49.78p per share.

There are higher yields out there, but few come with the same level of perceived stability. That said, United Utilities isn’t cheap. At 33 times earnings, the stock trades on a premium valuation.

The group is also committed to a £13bn investment programme over the next five years, which will go towards the biggest infrastructure upgrade in more than a century. And it’s putting aside £525m to help low income households pay their bills. Net debt is already high at around £9bn, bigger than its £7bn market cap.

Despite that, the board expects to increase dividends in line with inflation, while the balance sheet still looks sturdy, with £2.6bn in liquidity.

Personally, I’m more interested in stocks that have dropped but for more cautious investors, this kind of performance may be worth considering.

The Severn Trent share price is on the up

Severn Trent (LSE: SVT) has also made a splash this week, with its share price up 4.77%. It’s gained 5% over the year, and 22% over five years (again, before dividends). That’s also a pretty solid total return from an easily overlooked FTSE stock.

Like United Utilities, it’s not cheap, with a price-to-earnings ratio of around 33. It has net debt of around £7bn against a £7.7bn market cap.

The group tripled half-year profits to £192m in November but came under fire for missing drinking water standards, while paying CEO Liv Garfield £3.2m despite a £2m fine for a sewage spill in the River Trent. Last year, it hiked the dividend more than 9% to 116.84p per share. The current trailing yield is a solid 4.57%.

If markets recover quickly, these steady climbers could fall out of favour. But if interest rates drop or market volatility continues, these are worth considering for investors who prize a good night’s sleep.

The post Up 5% in the last crazy week! Are these 2 income stocks the ultimate FTSE defensive plays? appeared first on The Twelfth Magpie.