National Grid (LSE:NG.) - Share price, News & Analysis

NG. fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	4/6
Financial Health	1/6
Dividends	4/6

NG. Stock Overview

National Grid plc transmits and distributes electricity and gas.

Rewards

Trading at 26.8% below our estimate of its fair value

Earnings are forecast to grow 2.57% per year

Earnings grew by 67.5% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 4.85% is not well covered by earnings

Shareholders have been diluted in the past year

National Grid Competitors

Price History & Performance

Summary of all time highs, changes and price drops for National Grid
Historical stock prices
Current Share Price	UK£10.51
52 Week High	UK£12.71
52 Week Low	UK£8.81
Beta	0.0057
1 Month Change	-14.34%
3 Month Change	-6.71%
1 Year Change	13.84%
3 Year Change	25.75%
5 Year Change	10.42%
Change since IPO	259.14%

Recent News & Updates

May 26

National Grid (LON:NG.) Is Paying Out A Larger Dividend Than Last Year

National Grid plc ( LON:NG. ) will increase its dividend on the 17th of August to UK£0.34. This makes the dividend...

May 21

Does National Grid (LON:NG.) Have A Healthy Balance Sheet?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Shareholder Returns

	NG.	GB Integrated Utilities	GB Market
7D	1.7%	-0.5%	-0.3%
1Y	13.8%	-1.8%	-10.4%

Return vs Industry: NG. exceeded the UK Integrated Utilities industry which returned -1.8% over the past year.

Return vs Market: NG. exceeded the UK Market which returned -10.4% over the past year.

Price Volatility

Is NG.'s price volatile compared to industry and market?
NG. volatility
NG. Average Weekly Movement	3.2%
Integrated Utilities Industry Average Movement	4.0%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: NG. is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NG.'s weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1990	29,292	John Pettigrew	https://www.nationalgrid.com

National Grid plc transmits and distributes electricity and gas. The company operates through UK Electricity Transmission, UK Electricity Distribution, UK Electricity System Operator, New England, and New York segments. The UK Electricity Transmission segment provides electricity transmission and construction work services in England and Wales.

National Grid Fundamentals Summary

How do National Grid's earnings and revenue compare to its market cap?
NG. fundamental statistics
Market Cap	UK£37.31b
Earnings (TTM)	UK£2.18b
Revenue (TTM)	UK£18.45b

17.6x

P/E Ratio

2.1x

P/S Ratio

Is NG. overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NG. income statement (TTM)
Revenue	UK£18.45b
Cost of Revenue	UK£0
Gross Profit	UK£18.45b
Other Expenses	UK£16.27b
Earnings	UK£2.18b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 10, 2022

Earnings per share (EPS)	0.60
Gross Margin	100.00%
Net Profit Margin	11.83%
Debt/Equity Ratio	192.4%

How did NG. perform over the long term?

See historical performance and comparison

Dividends

4.8%

Current Dividend Yield

84%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NG. undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NG.?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NG.. This is calculated by dividing NG.'s market cap by their current preferred multiple.
What is NG.'s n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£37.31b

NG. key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	4.4x
Enterprise Value/EBITDA	14.4x
PEG Ratio	6.8x

Price to Earnings Ratio vs Peers

How does NG.'s PE Ratio compare to its peers?

NG. PE Ratio vs Peers

The above table shows the PE ratio for NG. vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.7x

Forward PE

Price-To-Earnings vs Peers: NG. is good value based on its Price-To-Earnings Ratio (17.6x) compared to the peer average (25.7x).

Price to Earnings Ratio vs Industry

How does NG.'s PE Ratio compare vs other companies in the Global Integrated Utilities Industry?

Price-To-Earnings vs Industry: NG. is expensive based on its Price-To-Earnings Ratio (17.6x) compared to the European Integrated Utilities industry average (10.6x)

Price to Earnings Ratio vs Fair Ratio

What is NG.'s PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NG. PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.6x
Fair PE Ratio	21.9x

Price-To-Earnings vs Fair Ratio: NG. is good value based on its Price-To-Earnings Ratio (17.6x) compared to the estimated Fair Price-To-Earnings Ratio (21.9x).

Share Price vs Fair Value

What is the Fair Price of NG. when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NG. (£10.51) is trading below our estimate of fair value (£14.35)

Significantly Below Fair Value: NG. is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: NG. is poor value based on its PEG Ratio (6.8x)

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Future Growth

How is National Grid forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NG.'s forecast earnings growth (2.6% per year) is above the savings rate (0.9%).

Earnings vs Market: NG.'s earnings (2.6% per year) are forecast to grow slower than the UK market (10.9% per year).

High Growth Earnings: NG.'s earnings are forecast to grow, but not significantly.

Revenue vs Market: NG.'s revenue (3.1% per year) is forecast to grow slower than the UK market (4.1% per year).

High Growth Revenue: NG.'s revenue (3.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NG.'s Return on Equity is forecast to be low in 3 years time (10.3%).

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Past Performance

How has National Grid performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-11.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NG. has high quality earnings.

Growing Profit Margin: NG.'s current net profit margins (11.8%) are higher than last year (9.5%).

Past Earnings Growth Analysis

Earnings Trend: NG.'s earnings have declined by 11.5% per year over the past 5 years.

Accelerating Growth: NG.'s earnings growth over the past year (67.5%) exceeds its 5-year average (-11.5% per year).

Earnings vs Industry: NG. earnings growth over the past year (67.5%) exceeded the Integrated Utilities industry 9%.

Return on Equity

High ROE: NG.'s Return on Equity (9.2%) is considered low.

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Financial Health

How is National Grid's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NG.'s short term assets (£18.0B) do not cover its short term liabilities (£24.8B).

Long Term Liabilities: NG.'s short term assets (£18.0B) do not cover its long term liabilities (£46.2B).

Debt to Equity History and Analysis

Debt Level: NG.'s net debt to equity ratio (178.4%) is considered high.

Reducing Debt: NG.'s debt to equity ratio has increased from 150% to 192.4% over the past 5 years.

Debt Coverage: NG.'s debt is not well covered by operating cash flow (13.7%).

Interest Coverage: NG.'s interest payments on its debt are well covered by EBIT (4x coverage).

Balance Sheet

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Dividend

What is National Grid current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.85%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NG.'s dividend (4.85%) is higher than the bottom 25% of dividend payers in the UK market (1.92%).

High Dividend: NG.'s dividend (4.85%) is low compared to the top 25% of dividend payers in the UK market (5.23%).

Stability and Growth of Payments

Stable Dividend: NG.'s dividends per share have been stable in the past 10 years.

Growing Dividend: NG.'s dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (84.1%), NG.'s payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (255.3%), NG.'s dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure

CEO

John Pettigrew (52 yo)

6.17yrs

Tenure

UK£6,506,000

Compensation

Mr. John Pettigrew, FEI, FIET, has been Chief Executive Officer at National Grid USA since April 01, 2016. Mr. Pettigrew has been the Chief Executive Officer at National Grid plc since April 1, 2016 and as...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD8.00M) is above average for companies of similar size in the UK market ($USD5.28M).

Compensation vs Earnings: John's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NG.'s management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: NG.'s board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.6%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31