Reasons to Add National Grid (NGG) to Your Portfolio Now
National Grid plc NGG, with a strong dividend history and rising earnings estimates, offers a great investment opportunity in the utility sector.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an investment opportunity at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for NGG’s fiscal 2024 earnings per share (EPS) has increased 0.72% to $4.16 in the past 60 days. The Zacks Consensus Estimate for NGG’s fiscal 2025 EPS has risen 0.67% to $4.46 in the past 60 days.
The company’s (three to five years) earnings growth is pegged at 3.19%.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, National Grid plc’s ROE is 7.96% compared to its industry average of 6.99%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
NGG has been increasing shareholders’ value through dividend payments. In November 2023, NGG announced a half-yearly dividend of $1.18 per share and an annual dividend of $2.36 per share. National Grid plc’s current dividend yield is 3.43%, better than the Zacks S&P 500 Composite’s yield of 1.37%.
Systematic Investment
In November 2023, National Grid plc announced that it would be investing just more than $52 billion by 2026 in the UK and the United States in its five-year spending framework, which is nearly $2.5 billion more than what it stated in May. National Grid has increased its investment in 17 major onshore and offshore transmission projects in the UK after the energy regulator Ofgem fast-tracked the projects.
Solvency
National Grid plc’s times interest earned ratio (TIE) at the end of the third quarter of 2023 was 3.2. The strong TIE ratio indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
Price Performance
In the past six months, NGG shares have risen 2.1% compared to its industry’s average decline of 3.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks related to the same industry are CenterPoint Energy CNP, Alliant Energy LNT and ALLETE ALE, each holding a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CenterPoint Energy’s long-term earnings growth rate is pegged at 7.51%. The Zacks Consensus Estimate for the company’s 2023 EPS is pegged at $1.5, implying a year-over-year increase of 8.70%.
Alliant Energy’s long-term earnings growth rate is pegged at 6.26%. The Zacks Consensus Estimate for the company’s 2023 EPS stands at $2.87, calling for a year-over-year increase of 2.50%
ALLETE’s long-term earnings growth rate is pegged at 8.10%. The Zacks Consensus Estimate for the company’s 2023 EPS is pegged at $4.34, indicating a year-over-year rise of 28.40%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
Alliant Energy Corporation (LNT) : Free Stock Analysis Report
National Grid Transco, PLC (NGG) : Free Stock Analysis Report
Allete, Inc. (ALE) : Free Stock Analysis Report
