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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Severn Trent's Sloan Ratio for the quarter that ended in Mar. 2026 was 5.69%.
As of Mar. 2026, Severn Trent has a Sloan Ratio of 5.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Severn Trent (LSE:SVT) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Severn Trent has a Sloan Ratio of 5.69%, indicating the company is in the safe zone and there is no funny business with accruals.
Severn Trent Sloan Ratio % Related Terms
Severn Trent Sloan Ratio % Historical Data
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The historical data trend for Severn Trent's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LSE:SVT vs AWK, WTRG, AWR: Sloan Ratio % Comparison
For the Utilities - Regulated Water subindustry, Severn Trent's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Severn Trent Sloan Ratio % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Severn Trent's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Severn Trent's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Severn Trent's Sloan Ratio for the fiscal year that ended in Mar. 2026 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
Severn Trent's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 227.4 (Sep. 2025 ) + 143.6 (Mar. 2026 ) = £371 Mil.
Severn Trent's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 654.5 (Sep. 2025 ) + 610.5 (Mar. 2026 ) = £1,265 Mil.
Severn Trent's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -798.2 (Sep. 2025 ) + -1095.8 (Mar. 2026 ) = £-1,894 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Severn Trent (LSE:SVT) has a Sloan Ratio % of 5.69% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Severn Trent and its competitors.
Is Severn Trent's Sloan Ratio % too high?
Severn Trent's current Sloan Ratio % is 5.69%. Overall, Severn Trent has a GF Score™ of 79/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Severn Trent's Sloan Ratio % compare to AWK and WTRG?
Severn Trent's Sloan Ratio % of 5.69% can be compared against companies in the Utilities - Regulated industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for an Utilities - Regulated company?
A good Sloan Ratio % depends on the Utilities - Regulated industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Severn Trent and its competitors. Severn Trent's current Sloan Ratio % is 5.69%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Severn Trent stock overvalued right now?
Based on GuruFocus' analysis, Severn Trent (LSE:SVT) is currently considered Fairly Valued. The stock's GF Value™ is £30.27, compared to a current price of £30.20 — trading 0.2% below its estimated fair value. The current Sloan Ratio % is 5.69%. Severn Trent's overall GF Score™ is 79/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Severn Trent (LSE:SVT), the current Sloan Ratio % is 5.69% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Severn Trent (LSE:SVT) Overvalued in 2026?
Based on GuruFocus' analysis, Severn Trent stock appears to be undervalued.
The current stock price of £30.20 is trading 0.2% below its estimated GF Value™ of £30.27.
GuruFocus considers Severn Trent to be Fairly Valued.
Key valuation signals for LSE:SVT:
Sloan Ratio %: 5.69%
GF Value™: £30.27 vs. price of £30.20 (0.2% below fair value)
No single metric tells the full story. See the LSE:SVT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Severn Trent PLC is a United Kingdom-based water utilities company. It mainly operates in the U.K., but also in the United States and other countries in Europe. The company derives the majority of its revenue from its regulated water and wastewater segment, which supplies water and conducts sewage and environmental services. The company also operates a business services segment that is involved with renewable energy operations. The company provides contract services to industrial and municipal clients to develop water treatment facilities and networks. The firm generates its renewable energy by using hydropower, wind power, and solar power.
79GF Score
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