You are here: Home - Investing - Experienced Investor - News -

Stock of the week: National Grid

0
Written by: YourMoney.com
05/11/2018
Ian Forrest, investment research analyst at The Share Centre, picks power and gas distribution company National Grid as stock of the week.

In times of volatile markets and uncertain economic prospects, investors are looking for companies that can generate income on a constant basis.

We have long been fans of National Grid for income seekers and the guarantee of dividends rising at least in line with RPI continues to be very appealing to investors. A very nice 5.8% yield at present makes it a good candidate for this week’s stock tip.

Investors interested in the sector will be aware it has been under pressure from politicians and regulators, which has led to an increase in share price volatility over the past two years.

Indeed, earlier this year there was expected news from Ofgem of a tougher regulatory framework that will lower profits from 2021 as a result of what it called “excessive profits” across the sector. These proposals were confirmed in July, impacting the share price.

Nevertheless, prospects for the company’s operations in the US are good and the UK operations remain on track to outperform this year. The group is benefiting from low interest rates on its cost of borrowings, and investors should appreciate that it expects earnings growth at the top end of its 5 – 7% range in the medium-term.

We recommend National Grid as a ‘buy’ for low to medium risk investors geared to an income portfolio.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week