Yü Group‘s (LSE:YU) a UK stock that’s confounded expectations. Over the past five years, it’s delivered a spectacular 1,800% share price return. And yet it still looks unusually cheap for a UK growth share.
Currently, the business trades at just 7.5 times forecast earnings, holds a really impressive net cash position of £80.2m, and offers a healthy — and growing — dividend yield that looks set to move north of 5% in just a couple of years.
What it does
Yü Group specialises in supplying electricity, gas, and water exclusively to UK businesses. Unlike many mid-tier operators, it isn’t a broker. It’s a licensed supplier, bundling utilities with straightforward contracts and adding value through digital metering, usage analytics, and sustainability options. The company’s known for its quick scaling in smart meters and for winning new SME and large enterprise customers across Britain.
Industry-wide trends look supportive. There’s an accelerating push for smart metering, transparency, and ESG. These are areas where Yü Group’s already strong. For businesses craving greener energy, Yü also offers packages that include 100% renewable electricity.
Furthermore, companies face rising pressure to cut costs and to simplify utility management, both of which are firmly in Yü’s marketing wheelhouse. By the start of 2025, Yü had already secured £566m in contracted revenue, up 9% from last year, underpinning both its impressive sales growth and greater earnings visibility.
The numbers add up
Earnings have snowballed. Adjusted EBITDA hit £48.8m in 2024 (up 11%), with pre-tax profit at £44.5m. Net cash stood at £80.2m, buoyed by prudent hedging alongside a deal with Shell that freed up working capital for further expansion.
And the balance sheet outlook only improves. Analysts forecast net cash to reach £117m in 2025, £142m for 2026, and a remarkable £168m for 2027. This is really worth noting for a company with a market cap of £272m.
Dividends are also improving. Starting at 60p per share for 2024, it’s on track for 84p in 2025, 90p in 2026, and 95p in 2027. The yield, currently 3.3%, will reach 4.7% by 2026 and 5.1% by 2027 if forecasts hold. That’s difficult to find among either high-growth or utilitarian dividend shares.
Forward earnings metrics are also compelling. Yü trades on 7.5 times forecast earnings for 2025, dropping to just 7 times in 2026. The net cash-adjusted price-to-earnings (P/E) ratio would sit around 5.2 times. Very attractive.
The bottom line
However, there are risks. Energy markets are by nature volatile, injecting uncertainty into what customers ultimately pay and what Yü pockets. While its revenue per customer is somewhat exposed to wholesale price swings, its hedging agreements reduce some pressure but do not eliminate it.
Rapid growth brings the usual operational and execution risks, and the highly competitive UK utilities space could erode margins. Even allowing for these risks, there’s a lot to like about the company. It’s certainly worth broader investor attention.
I’m going to be watching it very closely.
