As per my research, I recommend a buy rating for National Grid plc (NYSE: NGG). At today's $60.84, the utility stock is 42.8% undervalued from its estimated intrinsic value of $140.61. This is an excellent opportunity for a potential investor to consider adding the stock to their portfolio. The key concerns are:
Over the next 52 weeks, National Grid PLC has, on average, historically risen by 3.9% based on the past 23 years of stock performance.
In 14 of those 23 years, National Grid PLC has increased over the 52 weeks, yielding a historical accuracy of 60.87%.
The price of a share of National Grid PLC [NGG] currently is $60.84. The NGG score, which is 34, is 32% lower than the historical median score of 50 and suggests a higher risk than usual.
Regarding its historical Stock Score levels, NGG is trading in the 30–40% percentile range.
NGG Over-Valued at $154.67
NGG Fair-Value Estimate: $140.61
NGG Under-Valued at $126.55
Read More: Top utility stocks, How to assess a utility stock, How to screen for utility stocks, Top electrical stocks
Valuation of NGG
As of Q4 2022, National Grid has the following key metrics:
Earnings Per Share: $3.25
Book Value per Share: $35.51
Earnings Growth (YoY): Volatile
National Grid (NGG) Price Forecast
National Grid plc (LSE: NG) has agreed to sell DT Midstream, Inc. (NYSE: DTM) an additional 26.25% ownership interest in Millennium Pipeline in exchange for about $550 million on September 29, 2022. At closing, DT Midstream will own 52.50% of Millennium Pipeline. Cash in hand and available credit will fund the entire transaction.
The Board of Directors of DT Midstream has given its approval to the deal. The Hart-Scott-Rodino Antitrust Improvements Act waiting for the period's expiration or termination and other customary closing conditions must be satisfied before the transaction can be completed. The deal is anticipated to be finalized in the fourth quarter of 2022.
National Grid plc (LSE: NG.) has acquired Western Power Distribution plc from PPL WPD Investments Limited.
On March 17, 2021, National Grid plc (LSE: NGG) and PPL WPD Limited entered into a sale and purchase agreement. The agreement for PPL WPD Investments Limited (WPD) to be purchased for $7.8 billion. With the assumption of about 6.6 billion in debt, the consideration for the Western Power Distribution (WPD) acquisition is 7.8 billion in cash to be paid at closing. A daily ticking fee of 548,000 per day from January 1, 2021, until completion is due from National Grid Holdings because the consideration is subject to a locked box mechanism.
PPL and National Grid agreed to buy Narragansett Electric Company for $2.7 billion in equity in a related deal. The initial funding for the WPD Acquisition will come from bridge financing facilities for $8.25 billion, which will be used to pay for both the purchase of WPD and the refinancing of some of its debt. The money from the NECO Sale, the NGG Sale, and the issuance of new senior debt and hybrid capital securities, as necessary, will be used to repay this gradually.
UK's National Grid is selling Macquarie a 60% stake in its gas unit.
National Grid is a UK-based utility company that operates the high-voltage electricity transmission system in England and Wales and the natural gas distribution network in Great Britain. National Grid may have decided to sell a stake in its gas unit to Macquarie, a global investment bank and financial services company. It's also possible that the sale has already taken place or that it is still in the process of being negotiated. More information makes it easier for me to provide a more detailed response.
National Grid plc announces Mark Williamson's resignation as CEO
National Grid plc. Competitors
Some of the competitors in the electricity and gas utility industry include:
- EDF Energy: A British electricity company that generates, transmits, and distributes electricity and gas.
- Scottish Power: A Scottish electricity and gas company that generates, transmits, and distributes electricity and gas in the UK and Spain.
- Centrica: A British multinational utility company that supplies electricity and gas to homes and businesses in the UK and North America.
- SSE plc: A British multinational utility company that generates, transmits, and distributes electricity and gas in the UK and Ireland.
- EON: A German multinational electricity and gas company that generates transmits, and distributes electricity and gas in Europe and North America.
- RWE: A German multinational utility company that generates, transmits, and distributes electricity and gas in Europe and North America.
- Enel: An Italian multinational electricity and gas company that generates transmits, and distributes electricity and gas in Europe, North America, South America, and Africa.
- Iberdrola: A Spanish multinational electricity and gas company that generates transmits, and distributes electricity and gas in Europe and the Americas.
- ENGIE: A French multinational electricity and gas company that generates transmits, and distributes electricity and gas in Europe, North America, and South America.
- Fortum: A Finnish multinational electricity and gas company that generates transmits, and distributes electricity and gas in Europe and Russia.
Is it a good time to buy National Grid shares?
Shares of National Grid are very well-liked by investors. The share price has nearly doubled over the past five years, and the company has been paying out some very sizable dividends. There is a lot to be joyful about.
Why is National Grid falling?
As investors worry about the possibility of windfall taxes, the share price of the National Grid (LSE: NG) has fallen recently. Therefore, the power grid operator is 1% less expensive than at the start of 2022. Given the firm's strong defensive attributes, this modest reversal may come as a surprise.
Is NGG a good dividend stock?
Every Share of NGG receives a $3.12 dividend. The dividend yield of NGG is 5.13% per year. The dividend paid by National Grid is higher and lower than the US's 4.33% industry average and 5.33% market average.