This article was in yesterdays London Financial Times. Apparently some are concerned that National Grid will actually reduce the dividend. We should know more when OFGEM, the British regulators accept or don't accept an Infrastructure upgrade plan. Should be an anouncement in March.
From Financial Times, London
January 7, 2013
Dividend fears pull the plug on National Grid
By Bryce Elder
Fears of a dividend cut sent National Grid to its sharpest fall since July in a weaker London market.
Deutsche Bank forecast that National Grid would pare back investment plans or cut its dividend by 10 per cent for its financial year beginning in March, against consensus expectations for a rise.
“We do not believe National Grid can sustainably fund both its current high yield and high targeted asset growth,” said the broker.
Political risk around rising bills and retail profits mean UK utilities have lost their haven status, Deutsche said.
It saw new price controls on regulated networks eroding National Grid’s returns, which would put an “unacceptable” squeeze on dividend cover if the company delivers the investment budget assumed by regulator Ofgem.
National Grid slid 2.4 per cent to 694p in a weak sector. A spike higher in UK wholesale gas prices weighed against the other utilities after Statoil of Norway said it had cut natural gas exports.
The payroll system is just the tip of the iceberg.. There's a very good chance that their financial systems are out of whack as well. That's the dividends of outsourcing. I hear all their new systems are developed in India now and it shows.
who knows, i've had this stock for 25 years and still don't know why it takes these swings.I love the dividends so I hold on tight. Sometimes large investors dump it because they already qualify for the dividend that way they can use the cash for other stocks that are cheap. Then when the stock drops a dollar or more not so savvy investors sell theirs shares thinking something is wrong and the big guys buy it back at a discount. All i know is if I wasn't on a fixed income, I WOULD STILL BUY IT.