03-12-2015, 06:19 PM
(This post was last modified: 03-12-2015, 06:21 PM by DividendDragon.)
Hi guys this stock is looking attractive to me at the moment with a 5% dividend.
About the company:
National Grid Plc is an electricity and gas utility company. The UK Electricity Transmission includes high voltage electricity transmission networks in Great Britain.
Its UK Gas Transmission provides the gas transmission network in Great Britain and UK liquefied natural gas (LNG) storage.
US Regulated includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York and New England.
Financials;
Slow annual growth rate of 1.3%
Debt to equity = 2.11 although this is down significantly from previous years.
3bn cash (debt = 25bn GBP of debt) so could really pay down much of this debt with
cash.
EPS - a general upwards trend fluctuating over the past 5years
value
Avarage p/e over 13years = 12.73
Current = 11.63
dividend
An increase every year (bar 2011 because of a rights issue) since 1996
Payout ratio = 66% (LSE)
Growth rate has slowed significantly recently to around 2.5% yearly.
What do people think about this stock?
On one hand I feel it's very safe, everyone needs electricity right, and the management seem very shareholder friendly with their approach to the dividend but the pressure on the dividend is also clear - A swelling payout ratio, slowing growth and too high a debt to borrow to maintain.
But then again I feel that the dividend yield of 5% represents/compensates for the risk along with the low p/e. I can also wait 30+ years for a return to health.
I think I'm going to give it a miss for now, the pressure on the dividend is too much for me. Slowing dividend growth and slowing growth is disappointing.
My only problem is I'm unable to take advantage of the opportunities on the US stock exchange ( JNJ is very tempting ) as the £ to $ rate at the moment is poor and would not represent value.
The reason for my posting is just to get everyones opinion on this. Again: I'm new to investing so please notify me on any key metrics that I've missed.
Lewys
About the company:
National Grid Plc is an electricity and gas utility company. The UK Electricity Transmission includes high voltage electricity transmission networks in Great Britain.
Its UK Gas Transmission provides the gas transmission network in Great Britain and UK liquefied natural gas (LNG) storage.
US Regulated includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York and New England.
Financials;
Slow annual growth rate of 1.3%
Debt to equity = 2.11 although this is down significantly from previous years.
3bn cash (debt = 25bn GBP of debt) so could really pay down much of this debt with
cash.
EPS - a general upwards trend fluctuating over the past 5years
value
Avarage p/e over 13years = 12.73
Current = 11.63
dividend
An increase every year (bar 2011 because of a rights issue) since 1996
Payout ratio = 66% (LSE)
Growth rate has slowed significantly recently to around 2.5% yearly.
What do people think about this stock?
On one hand I feel it's very safe, everyone needs electricity right, and the management seem very shareholder friendly with their approach to the dividend but the pressure on the dividend is also clear - A swelling payout ratio, slowing growth and too high a debt to borrow to maintain.
But then again I feel that the dividend yield of 5% represents/compensates for the risk along with the low p/e. I can also wait 30+ years for a return to health.
I think I'm going to give it a miss for now, the pressure on the dividend is too much for me. Slowing dividend growth and slowing growth is disappointing.
My only problem is I'm unable to take advantage of the opportunities on the US stock exchange ( JNJ is very tempting ) as the £ to $ rate at the moment is poor and would not represent value.
The reason for my posting is just to get everyones opinion on this. Again: I'm new to investing so please notify me on any key metrics that I've missed.
Lewys